In the list of recommendations on ‘Promoting Networking and Telecom Equipment Manufacturing in India’ released by the sector regulator on Saturday, it has also suggested the introduction of local value addition norms in performance linked incentives scheme (PLI scheme), tax relief as part of fiscal incentives, and setting up a dedicated master fund towards to address the relative cost disability faced by the industry, among others.
“It has been recommended that Government should follow a nudge approach and Telecom Service Providers (TSPs) should be incentivised to deploy indigenously manufactured equipment by reducing their Applicable Gross Revenues on annual net basis, by an amount equivalent to the aggregate certified value of indigenous NATE deployed in respective telecom networks during a financial year,” Trai said.
It has recommended the establishment of a dedicated master fund – the NATEDF – Networking and Telecommunications Equipment Development fund along the lines of the Electronics Development Fund (EDF).
This fund should provide for venture capital funding in public-private partnership mode to start-ups in need of accelerator support. “For the same, at least 15% of NATEDF’s total pool of Rs 10,000 crores should be earmarked as Committed Public fund for Daughter fund(s) for innovation practice,” Trai said.
Trai also said that telecom software should be recognised as a separate category, and suggested setting up a dedicated fund, Telecom Software Development Fund. The initial committed corpus for this would be of Rs 1000 crore.Trai has also suggested the introduction of a new scheme with specific provision to extend financial support to the industry towards procurement of fixed assets, plant & machinery, for new production units or capacity augmentation of the existing units which can be fashioned after the Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS).“The salient features of the recommended scheme include extending one-time support up to 25% of the overall Capital expenses towards establishment of ‘Plant & Machinery’ for undertaking domestic production of telecom & networking equipment/components,” Trai said.
Broader Vendor Base
“To ensure that the entire scheme’s budget outgo is not cornered by few big NATE manufacturers, it has been recommended that at least one-fourth of the scheme outgo should be to support applicant beneficiaries that are drawn from such MSME entities where eligible planned investment during the entire tenure of the Scheme does not exceed Rs. 50 Crore,” it added.
An enterprise engaged in manufacturing of NATE products and has met export volume of $15 million should be granted Self Ratification benefit under Advanced Authorisation Scheme (AAS) on deemed basis, it added.
“TRAI has recognised semiconductor fabrication as one of the key manufacturing activities in the indigenous manufacturing of electronics products including NATE. TRAI’s Recommendations of 2011 had already recommended the establishment of cutting-edge fabrication facility by providing Government’s fund support up to 75 %, where equity is capped at 49% and rest as debt,” Trai said.
In a separate circular on ‘Improving Telecom Infrastructure in Northeastern States of India’, Trai has recommended that state governments of Northeastern (NE) States including Sikkim should be engaged to improve telecom infrastructure in the region.
This includes harmonising respective state policies with the “The Indian Telegraph Right of Way Rules, 2016”, exemption of RoW charges rural, tribal, and hilly regions for a duration of five years, and waiver of the additional 25% ‘Tribal Development Charges’ being imposed upon telecom operators wherever applicable in the NE states including Sikkim.
Additionally, Trai has recommended that the states in the region provide electricity to telecom sites on priority, and waive or subsidize last mile installation charges for telecom sites.
