The Government of India is examining the possibility of taxing mobile data usage as part of efforts to diversify revenue streams from the telecom sector and address concerns around rising digital consumption. The proposal was discussed during a telecom sector review meeting chaired by Prime Minister Narendra Modi on January 7, according to minutes of the meeting reviewed by Mint and reported by Jatin Grover on 10 March 2026.
During the meeting, the Department of Telecommunications (DoT) was tasked with studying a framework that could generate revenue while encouraging constructive digital usage and discouraging excessive consumption, particularly among children. The department has been asked to submit a proposal by September 30.
Rs 1 per GB levy could generate Rs 22,900 crore
India’s mobile data consumption stood at around 229 billion GB in FY25. A levy of Rs 1 per GB could potentially generate approximately Rs 22,900 crore in revenue for the government. At present, telecom users already pay an 18 percent goods and services tax (GST) on mobile recharges. In the Economic Survey 2026, The Centre had flagged the growing spread of digital addiction among children. The proposed measure assumes significance as the Centre seeks to broaden telecom revenues beyond spectrum auctions and licence fees from operators.
Experts warn of implementation challenges
Satya N. Gupta, former principal adviser to the Telecom Regulatory Authority of India, was quoted as saying that taxing data usage would be difficult to implement and could undermine innovation while affecting India’s position as a global leader in affordable data consumption.
Most countries tax income of companies that have data at the core of their business or some try to reduce screen usage in other ways with restrictions on timings of gaming services or age of consumers.
“Any kind of taxes on data usage would be impossible to implement. The same could also cause disruption for users in the country and limit innovation. Such a tax may bring down the country from the leadership position in the emerging domain,” said Satya N. Gupta, former principal advisor of Telecom Regulatory Authority of India (TRAI), according to the report.
The January 7 meeting was reportedly attended by Communications Minister Jyotiraditya Scindia, Minister of State for Communications Chandra Sekhar Pemmasani, Cabinet Secretary T.V. Somanathan, Expenditure Secretary V. Vualnam, Telecom Secretary Amit Agrawal, and NITI Aayog CEO B.V.R. Subrahmanyam.
BSNL workforce rationalisation discussed
The meeting also reviewed several other telecom sector priorities, including workforce rationalisation at state-owned telecom operator Bharat Sanchar Nigam Limited (BSNL). The minutes noted that BSNL remains a “human resource heavy” organisation and suggested repatriating deputed staff and assessing personnel to reduce employee strength. As of March-end, BSNL had 54,875 employees, with staff costs accounting for more than 37 percent of its operating revenue—significantly higher than private telecom operators such as Reliance Jio Infocomm and Bharti Airtel.
Reliance Jio Infocomm’s employee cost accounted for 1.6 percent or Rs 1,490 crore of its revenue during the period. Bharti Airtel’s standalone employee expense for the period was Rs 1,678 crore, or just 1.9 percent of its topline, according to the report.
The review also highlighted India’s continued dependence on imports for telecom equipment and called for accelerated localisation of key network components. The DoT has been asked to prepare a roadmap by June to indigenise at least 10 major telecom components annually, in line with the government’s push for self-reliance.
Other action points discussed at the meeting included strengthening national telecom network security, resolving issues in the undersea cable industry, and promoting Made-in-India telecom technologies in global markets. The minutes also stressed that SIM cards should be issued only through Aadhaar-based biometric verification.
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