Telecom sector registers rapid growth; farm sector yearns for more support

With the increasing telephone and broadband connections, the telecom sector has been growing rapidly, said Economic Survey 2014-15 tabled in Parliament on Friday, whose primary author is Chief Economic Advisor Arvind Subramanian.

During April-November 2014-15, 31.2 million new telephone connections were added way ahead of the 12.13 million new connections in the corresponding period of 2013-14. Overall teledensity has increased from 75.23 per cent at the beginning of April 2014 to 77.12 per cent at the end of the November 2014. Total broadband connections have touched 82.22 million, it said.

Under the National Optical Fibre Network (NOFN) project, the government has completed cable laying in just about 5,000 villages.  The NOFN project aims to provide 100 Mbps high-speed broadband connectivity to 2.5 lakh gram panchayats by December 2016 and the estimated cost of the project is around Rs 30,000 crore. The government has set a target of rolling out optical fibre network across 50,000 village panchayats by the end of March 2015, 1 lakh by March 2016 and another 1 lakh by December 2016.

The survey said the government is going to conduct spectrum auction next month of four set of airwaves — 800 Mhz band (CDMA), 900 Mhz and 1,800 Mhz (presently being used for 2G) and 2,100 Mhz band (used for 3G).

It has approved the minimum or auction start price for the 2,100 Mega-Hertz band or 3G spectrum, which will garner at least Rs 17,555 crore. The reserve price for auction of 2G spectrum in 800 MHz, 900 Mhz and 1,800 MHz bands will fetch the government at least Rs 64,840 crore.

If all spectrum gets sold at the reserve price, the government will garner non-tax revenues of Rs 82,395 crore from the telecom sector through this auction only.

Cautions on farm sector
Citing declining global agricultural prices, the Economic Survey on Friday cautioned of increased “political pressure” to support the farm sector which provides livelihood to more than 50 per cent population of the country. The Economic Survey, presented to Parliament by Finance Minister Arun Jaitley, recommended “huge investments” in areas such as research, irrigation and warehousing to boost the sector, instead of providing subsidies.

“Rationalisation of subsidies and better targeting of beneficiaries through direct transfers would generate part of the resources for the public investment that is essential in research, education, extension, irrigation, water-management, soil testing, warehousing and cold storage,” the Survey said.

It also suggested distortions emerging from various policies, including exempting user charges for electricity and water need to be reduced, though better targeting and eliminating leakages. It also asked the government to re-look at the role of the Indian Council of Agricultural Research (ICAR) and if there is a need for separating research, education, and extension. Pointing out that the public expenditure in agriculture is only one-fourth of expenditure towards food and fertiliser subsidies, the survey said: “Focus of public expenditure for agriculture so far has been on provision of subsidies and it is time it shifted towards investments to boost productivity.”

According to the survey, higher investments are necessary as there are wide differences in yields between states. Even the best of states have much lower yield in different crops when compared with the best in the world. This provides ample opportunity to increase production by bridging the yield gap, it added.

Asking the government to make “every effort” to bring states on board for creating a national common market, the Survey also suggested the government should use Constitutional provisions if states do not support this move.