Budget 2001: Full Coverage

Telecom:
Even as the budget has left the custom duties on the GSM mobile handsetsuntouched, the good news for the WLL CDMA service providers is that thebasic custom duties on CDMA handsets will come down from 25 to 15 per cent.

The bad news: it is still 10 per cent higher than the basic duty of 5 percent custom duty charged on GSM handsets.

Meanwhile, the operators are happy that the costs of setting up telecomnetwork infrastructure will come down as the duties for network components,which was 22 per cent for Base Transceiver Stations (BTS) and over 50 percent for microwave radio's will now come down. Says Mr Girish Rangan,executive director and CEO, BPL Mobile Communications: "We will be able tocover more subscribers in the same investment." Finally, the local telecomequipment manufacturers, who were pitching for at least a 10 per centdifferential between imported and local equipment, are not happy that theduty cut, since the cheaper imported products will eat into their market.

Information technology:
The budget has been a let down for the hardware industry, said Mr BaluDoraisamy, managing director, Compaq Computer (India) Pvt Ltd. The hardwareindustry has been looking forward to the rationalisation of tariff with areduction in excise duty to 8 per cent from the existing 16 per cent, andabolition of the 4 per cent Special Additional Duty (SAD).

But the drop in surcharge in the present budget results in a reduction ofonly 1.8 per cent on finished goods. The impact on raw materials will be anegligible 0.5 per cent reduction. MAIT's suggestions that the duty onimported parts and components including items of dual usage be brought downto nil, or that the terminal year for nil duty be extended to 2005 have notbeen considered, he added.

Mr Vinni Mehta, director, Manufacturers' Association of InformationTechnology (MAIT), also says, "The PC prices will not have any impact asthere is no change in the excise and custom duty of IT hardware. The graymarket will continue to grow unabated as local levies continue to remainhigh."

Media:
The Information and Broadcasting Ministry had recently indicated that themedia industry should be brought on par with the telecom and the IT sectorsas far as taxes and duties on equipment are concerned.

With customs duty reduction on cinematographic equipment from 25 to 15 percent, broadcasters are gearing up for some "competition".

Says Mr Subhash Ghai, a prominent film producer: "This move by thegovernment to enable us to compete globally." As up to 25 per cent of thecost of a film goes towards hiring equipment, with this move the cost ofhiring will go down substantially, explains Mr Ghai.

Another Bollywood personality, Mr Randhir Kapoor of RK Films, is very happywith the lower customs duty on cinematographic equipment. "Now we will beable to bring in state-of-the-art equipment at an affordable price, whichwas previously restricted only to the big houses," Mr Kapoor says.