Policy News And Views December 2008

Policy News & Views Indicus Analytics December, 2008 TELECOM HC seeks Government response on spectrum allocation policy The Delhi High Court sought a response from the Centre on a petition challenging its first come-first serve procedure adopted in spectrum allocation. This mechanism under priced the scarce resource and since the license got resold in the secondary market it transferred rents to private companies causing a huge loss to the public exchequer. The Minister of Communications and Information Technology Mr. A. Raja, said that he will resign if allegations made against his decision to allocate 2G mobile spectrum on a first-come-first-served basis was proven wrong. Was he wrong in following a first-come first served policy in the allocation of 2G spectrum? Our view is that by doing so he committed a major policy blunder and accountability asks for him to lose his job, but will it ever happen in our country? Read More ... EDUCATION Cabinet clears the long-pending Right to Education Bill The Cabinet cleared the long-pending Right to Education Bill, which promises free and compulsory education for children between 6 and 14. If this Bill gets passed in the parliament, education would become a fundamental right; it would be legally enforceable duty of the Centre and the states to provide free and compulsory education. A group of ministers cleared the draft legislation early this month and also maintained the contentious provisions of the original draft like 25 percent reservation in private schools for disadvantaged children from the neighborhood at the entry level. Our view is that this measure is a reasonable mechanism for social inclusio through public private n partnership (PPP). Read More ... CIVIL AVIATION Custom duty on Jet fuel scrapped Government withdrew 5% Customs duty on jet fuel and Oil companies also cut Air Turbine Fuel (ATF) prices by Rs 9,429.87 per kl from midnight of October 30. This decision is expected to reduce operating costs of carriers by up to 8% Fuel contributes 40% to the total operating cost of a full-service carrier. In the case of a low-cost carrier, the cost is as high as 52%. Our view is that high taxes and administered price of ATF causes huge distortion in the sector compromising efficiency and this is a step in the right direction. Read More ... Edited by: Payal Malik 1st December 2008

MORE NEWS Cabinet Okays bill to raise FDI in insurance to 49 Forum of Indian Regulators advises open access percent regime The government has decided to increase the foreign The Forum of Indian Regulators has recommended the direct investment (FDI) limit in insurance companies introduction of open access system so that consumers from 26% to 49%. have a choice in buying power. quot; No cut in oil prices contemplated in the future 3G spectrum allocati by end-Jan: Government on International crude oil prices have slid from an all- India will allocate spectrum for next generation time high of USD 147 to USD 50 a barrel, but public wireless networks to successful bidders by the end of sector oil companies continue to make losses on sale January after holding an auction as planned earlier in of diesel, domestic LPG and kerosene. the month. Special dedicated fund of 50K cr. to provide loans Annual spectrum fees for telcos to be raised to infrastructure project India will charge a fee of 1-2 percent of mobile The government is planning to set up a special operators' revenue for using additional airwaves and dedicated fund to provide loans to infrastructure will also levy a one-time charge for spectrum beyond projects—primarily roads, airports, ports and power 6.2 MHz. plants—being developed by both private companies and government-private joint ventures. Government approves new toll policy NTPC, state power firms knock ministry door on In a move to make national highway projects more coal shortage attractive for the private sector, the Cabinet The state-run NTPC and various state such as Committee of Economic Affairs (CCEA) has approved Maharashtra, Andhra Pradesh have made a fresh a new toll policy, which will allow operators to raise appeal to the coal ministry to immediately resolve user charges on an annual basis. issues relating to the fuel supply agreement (FSA) and e-auction of coal as the coal stock situation is becoming worse with each passing day. Contact Info indic@indicus.net Indicus Analytics,2nd floor, Nehru House, 4 Bahadur Shah Zafar Marg, New Delhi -110002 Phone No: 011-42512400

Policy News And Views December 2008

by Indicus Analytics Private Limited

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