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Rediff.com  » Business » Jaitley bets big on road toll, telecom to boost revenues

Jaitley bets big on road toll, telecom to boost revenues

July 11, 2014 10:40 IST

Jaitley bets big on road toll, telecom to boost revenues

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The National Democratic Alliance government is banking on a 10 per cent increase in income from sources other than taxes for a 15 per cent increase in total revenue receipts.  

The government expects to get Rs 2,12,505 crore (Rs 2125.05 billion) from dividend and profits, interest, fees, fines and other sources like licence fee and charges for use of public goods and services.

Three areas in particular – telecom, roads and bridges, and publicity and information – are being looked at as major sources.

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Image: Finance Minister Arun Jaitley has a focus on infra to enhance revenues.
Photographs: Courtesy, Mumbai International Airport

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Jaitley bets big on road toll, telecom to boost revenues

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The sale of telecommunication spectrum is expected to bring Rs 45,471 crore (Rs 454.71 billion).  

In fact, the major chunk of the Rs 19,279-crore (Rs 192.79 billiion) increase in non-tax revenue is on account of higher one-time charges levied in accordance with Telecom Regulatory Authority of India recommendations on the auction of 1800, 900, and 800 MHz spectrum.  

Besides this, the department of telecommunication also collects recurring licence fee from various operators licensed by it, as well as a one-time entry fee from new operators.

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Image: The sale of telecommunication spectrum is expected to bring Rs 45,471 crore to the exchequer.
Photographs: Courtesy, Sony

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Jaitley bets big on road toll, telecom to boost revenues

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The government also expects to double the revenue from road and bridges to Rs 10,924 crore (Rs 109.24 billion) during 2014-15.

However, the increase of Rs 5,835 crore (Rs 58.35 billion) from toll on roads and bridges and payment made by the state governments to the Border Roads Development Board will be possible only if the pace of construction of new highways improves substantially or if toll fee is increased.  

It is not only toll collection that is expected to boost government revenue, but also charges on services rendered.

For instance, education, sport, art and culture are estimated to yield Rs 634 crore (Rs 6.34 billion).

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Image: The government is keen to strengthen cash flows via toll taxes.
Photographs: Courtesy, Jaypee Infratech

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Jaitley bets big on road toll, telecom to boost revenues

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Besides, income from publicity and information during 2014-15 is expected to increase almost four-fold to Rs 2,058 crore (Rs 20.58 billion).

Given last year's revised estimates that showed an earning of only Rs 563 crore (Rs 5.63 billion), this figure appears inflated.

The receipts under this head include charges from advertising and visual publicity, sale of publicity, sale of publications, film rentals and receipts from frequency modulations.

Interestingly, at the beginning of 2013-14, too, the government had expected to earn Rs 2,021 crore (Rs 20.21 billion).

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Image: The government is keen to push up revenues in 2014-15.
Photographs: Mansi Thapliyal/Reuters

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Jaitley bets big on road toll, telecom to boost revenues

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A marginal increase of Rs 2,041 crore (Rs 20.41 billion) is estimated from dividend and profits from government-owned companies and departments.

Besides, the government's income from the energy sector is expected to increase primarily on account of the doubling of clean energy cess – from Rs 50 a tonne to Rs 100 a tonne.

The petroleum and coal sectors are expected to fetch lower revenue.

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Image: The government's income from the energy sector is expected to increase primarily on account of the doubling of clean energy cess.
Photographs: Reuters

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Jaitley bets big on road toll, telecom to boost revenues

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Interest receipts and external grants are also expected to give the government lower revenue.

The interest on loans to states is estimated to fetch Rs 8,359 crore (Rs 83.59 billion) as against the Rs 8,523 crore (Rs 85.23 billion) in 2013-14.  

The reduced income is a result of debt consolidation of Sikkim and West Bengal, in line with the recommendations of the Thirteenth Finance Commission.

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Image: The interest on loans to states is estimated to fetch Rs 8,359 crore to the exchequer.
Photographs: Jayanta Shaw/Reuters

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The consolidation was done since the two states enacted the Fiscal Responsibility, Budget and Management Act (FRBMA).

“Accordingly, the central loans from the Ministry of Finance contracted up to March 31, 2004, and outstanding at the end of March 31, 2010, have been consolidated for a fresh term of 20 years at an interest rate of 7.5 per cent,” said the Receipts Budget. 

The Thirteenth Finance Commission had also recommended writing off loans from the Centre to states for centrally sponsored schemes administered by departments and ministries other than the finance ministry.

The cut-off date for such write-offs is the preceding year in which FRBMA was enacted.

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Image: The Thirteenth Finance Commission has recommended writing off loans from the Centre to states for centrally sponsored schemes.
Photographs: Jitendra Prakash/Reuters

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