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Sunday, April 17, 2011

Good, Bad, Ugly and Self Destructive features of TRAI recommendations to support Indian Telecom Manufacturing

Policy prescriptions can be classified as Good, Bad, Ugly or Self Destructive using Stephen J. Ezell and Robert D. Atkinson (WWW.ITIF.ORG) narration. When both India and trading partners are winners, then that policy is Good, Bad when both India and  the world lose, Ugly when only India wins and Self destructive when India loses but competing nations win.

Policy Recommendations- Good
  •  Set up an International standard Testing and Certification Agency by way of converting TEC into an Autonomous Agency. 
  • To remove the comparative tax disadvantage on domestic manufactured products. 
  • The requirement for “provenness” be waived for domestic manufactured products provided  the product meets the requirement of quality, technical specifications and standards and are certified by the testing and certification organisation. 
  • Ten telecom clusters be identified immediately. 
  • A Telecom Research and Development Park should be established. 
  • Set up Telecom Research and Development Fund(TRDF) . 
  • Create a Telecom Manufacturing Fund(TMF) for providing venture capital to indigenous manufacturing.
Policy Recommendations- Bad
·         Subsidy for capital and working capital , deferring the payment of Excise/Sales Tax/VAT/GST, Income Tax holiday, exemption from countervailing duties,  Excise duty etc

Policy Recommendations- Ugly
·         Set up a second fab unit with government funding.

Policy Recommendations- Self Destructive
·         Preferential market access to domestic manufacturers in procurement by the Government and Government Licensees, with incentives and penalties.

What is your view?

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