Create Digital Infra Fund, demands CII

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SME Times News Bureau | 25 Jan, 2021
In the run-up to the upcoming Union Budget, the Confederation of Indian Industry (CII) has sought creation of 'Broadband Infrastructure Fund' towards building digital infrastructure.

The industry body has suggested that the Government make a token budgetary allocation of Rs 5,000 crore in the upcoming Budget 2021-22 towards building the Broadband Infrastructure Fund.

It has highlighted that a rapid acceleration in the creation of digital infrastructure will be an effective tool for inclusive digitalisation which will help add to economic growth and employment.

CII had constituted a Task Force on Digital Infra, chaired by J.S. Deepak, Former Telecom Secretary. The task force consists of leaders from network & passive infrastructure providers, telecom service providers, tech equipment manufacturers, academic institutions and think tanks.

Regarding the pre-budget recommendations for the digital infrastructure sector, Deepak said, "To achieve the dream of Digital India and the goals of NDCP-2018, major investments are required. Considering the financial stress that the sector is going through and the growing digital divide in urban and rural areas, it is important for the Government to allocate specific funds towards building nationwide digital infrastructure".

The industry body said that in line with some of the global peers, the Government should consider increasing government funding for broadband infrastructure, especially where private investment is not adequate.

Further, CII proposed to the government to allow access to alternative and cheap sources of capital for the digital communications sector to scale up the necessary infrastructure for the rapid data demand and 5G rollout. The Task Force suggested to include Hi-Tech in Priority Sector Lending for public sector banks and permit digital communications sector to access long-term low-cost capital through issuing infrastructure debt bonds.

Additionally, in order to ensure financial stability for the sector, the Task Force suggested to reduce the spectrum Usage Charge (SUC) to 1 per cent. The recommendations also included extension of investment linked incentives under Section 35AD of the Income Tax Act to telecom infrastructure service providers for equipment manufactured in India.

In order to boost domestic manufacturing, CII suggested to extend Export Credit scheme for another one year and provide the higher rate benefit of 5 per cent. CII recommended various measures for indigenisation of digital infrastructure and encouraging domestic manufacturers as key for Atmanirbhar and Surakshit Bharat.