On February 1, 2022, Nirmala Sitharaman, Finance Minister of India, made the union budget announcements for the coming financial year. Focusing on the telecom sector and 5G, the finance minister said that the government would come up with a production linked incentive (PLI) scheme for the manufacturing of 5G equipment as well as confirmed the 5G rollouts for FY23 with the spectrum auctions slated for CY2022.
Along with this, Sitharaman said that 5% of the annual collection from the Universal Service Obligation Fund (USOF) would go towards helping with the proliferation of broadband in rural India.
Vishwakumara Kayargadde, Co-Founder and COO, Saankhya Labs, said the announcements from the finance minister would help with the rollout of 5G mobile services within FY23.
“We welcome the Finance Ministry’s intent to launch a design-led manufacturing scheme that will help build a strong ecosystem for 5G in the country. In addition to this, the government’s measures towards promoting a semiconductor manufacturing ecosystem will attract young talent and make the industry more efficient and competitive. This will further boost fabless companies such as ours and other MSMEs working in the deep tech space, helping them engage in product R&D and design,” said Kayargadde.
Kayargadde added that the government’s move to promote R&D and commercialisation of tech and solutions for enabling a faster broadband rollout in the rural areas of the country is laudable.
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Mahalakshmi Satish, Director, Prodigy Education India, said rising internet penetration across their three cities and towns because of the boost to the country’s digital infra will be the necessary help in the direction of access and affordability that edtech requires.
TR Dua, Director General, Digital Infrastructure Providers Association (DIPA), said more job opportunities would be created as the usage of telecom services and digital infrastructure boosts in the rural areas.
At the same time, Dua was a little disappointed with the government excluding the budget recommendations for the amendment to make input tax credit available on telecom towers and increase the depreciation on batteries used by telecom infrastructure service providers and industries users so that 95% of the cost can be depreciated in the next three years.
Josh Foulger, Managing Director, Bharat FIH Ltd, said the demand for 5G smartphones would boost with the confirmation of 5G spectrum auctions in CY22 and will enable more customers to be a part of the next level of the digital economy.
Ankit Agarwal, MD, Sterlite Technologies (STL), said the government’s decision on investing in digital infrastructure would be essential for building a robust digital economy.
Sabyasachi Majumdar, Senior Vice President & Group Head - Corporate Ratings, ICRA Limited, said, “the budget focused on increasing the digital penetration in the country by way of e-learning, digital health programmes and digital banking. This is likely to propel the usage of telecom services.”
Lt. General Dr S P Kochhar, DG, Cellular Operators Association of India (COAI), said the body is glad to see the government’s focus on digital connectivity and announcement of the 5G spectrum in 2022 along with the PLI scheme for 5G equipment manufacturing and proliferation of broadband in rural India.
Kochhar added that COAI is a little disappointed to see some of the long-standing demands still being unaddressed by the government.