‘Mere R&D and cre­ation of IPR will not re­sult in 80% lo­cal pro­duc­tion by 2020’

Voice&Data - - NEWS AND VIEWS - Pravin Prashant

How is TEMA push­ing the tele­com man­u­fac­tur­ing in the coun­try?

In the last 3-4 months, we have re­al­ized that a lot needs to be done for in­clu­sive growth in the tele­com in­dus­try. In terms of sta­tis­tics, we have mo­bile sub­scrip­tions of more than 800 mn, but as far as equip­ment man­u­fac­tur­ing is con­cerned, we are vir­tu­ally neg­li­gi­ble. For ex­am­ple, the im­port of in­fra­struc­ture equip­ment is in the range of ` 50,000-` 60,000 crore whereas the In­dian do­mes­tic man­u­fac­tur­ing is in the range of ` 1,000 crore only.

Both in NTP’94 and NTP’99 pol­icy, we find that the gov­ern­ment was con­scious about man­u­fac­tur­ing of do­mes­tic prod­ucts and it also talked about In­dia be­com­ing self-re­liant in the tele­com man­u­fac­tur­ing and also cater­ing to the whole world. NTP’11 is fo­cused on R&D and man­u­fac­tur­ing and it also talks about 30% lo­cal sourc­ing in the first year and grad­u­ally achiev­ing 85% by 2020. This is all good, but the con­cern is that what is the roadmap to achieve it? By 2020, our im­port bill in tele­com will be­come ` 250,000 crore and it will be 4 times the oil im­port bill. So, it is im­por­tant to achieve our goals and do not miss out for any rea­son as it will leave us far be­hind.

How can we achieve 80% lo­cal pro­duc­tion by 2020?

Mere R&D and mere cre­ation of IPR will not re­sult in 80% lo­cal pro­duc­tion by 2020. R&D has to mix up with com­mer­cial­iza­tion and the two has to go to­gether. There­fore R&D will re­quire spe­cial im­pe­tus and there should be car­rot-and-stick pol­icy. We at TEMA, are rec­om­mend­ing 5% cess to be col­lected from the op­er­a­tors in In­dia to boost R&D. At the same time the ap­proach of car­rot is that those buy­ing lo­cal prod­ucts will be granted this con­ces­sion.

An­other im­por­tant as­pect of achiev­ing the de­sired goal is to pro­vide mar­ket ac­cess, whereby in pur­chase of gov­ern­ment hard­ware, pref­er­ence should be given to do­mes­tic prod­uct. The gov­ern­ment is uti­liz­ing USO fund for in­creas­ing tele­den­sity and the caveat can be that do­mes­tic prod­ucts will be de­ployed for USO projects. Sup­port from the gov­ern­ment is that it is dis­count­ing the dis­abil­ity fac­tor which the In­dian man­u­fac­turer is ceased with and this is in the range of 14-15%. The cost of the fund in some coun­tries are neg­li­gi­ble or 2-3% and there is zero duty too. On the other hand, the In­dian man­u­fac­turer is posed with all sorts of taxes like mu­nic­i­pal tax, oc­troi tax, and cen­tral sales tax (CST). So, the whole cost comes around 22%.

There is al­ways an ex­cuse that com­po­nents are not avail­able lo­cally. So, how are we go­ing to achieve 80% by 2020?

We are re­quest­ing DOT to de­pute a team to know how this sys­tem works and give fur­ther im­pe­tus. The need to­day for the gov­ern­ment is to ac­cel­er­ate the speed with which de­ci­sions are taken or we will miss the bus. If we don’t act right now noth­ing will be left for man­u­fac­tur­ing. Once the peo­ple re­al­ize that there is ` 250,000 crore op­por­tu­nity and the gov­ern­ment is pro­mot­ing do­mes­tic man­u­fac­tur­ing, many gi­ants who are not fo­cused in tele­com will also jump.


Ashok K Ag­gar­wal


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