AGR: NITI Aayog does a flip-flop on minimum floor price for telcos

Less than a week after NITI Aayog sent its comments to the Telecom Regulatory Authority of India (Trai) opposing any kind of floor price for data or voice tariffs, it has said in another letter that it stood “for” putting in place a minimum floor price.

In a letter dated February 28, Archana G Gulati, joint secretary at the government think tank, said that the consultation paper itself highlighted the fact that market interventions in the form of price controls, such as the proposed minimum floor price, are likely to disincentivise competition, cost efficiency, price, and quality parameters and also deter new entries and innovation.

“In fact, the greatest disruption in recent years was the entry of a new player with better technology who made significant inroads into the market, thanks to very low tariffs. This brought intense competition and growth to the market,” the letter said.