Bharati Airtel, India’s leading mobile player and telecom equipment manufacturer has sought duty reduction and financial incentives for promoting manufacturing of telecom equipment in India.

The telecom manufacturer has said “Indian manufacturers are hit by high taxes and duties on import and export of telecom equipment”, in a response to the pre-consultation paper by TRAI, the telecom regulator.

Bharati added that there should be no excise duty on telecom equipments and the GST rates for the telecom equipments should be waived off. Today, all equipments except handsets, attracts a 10% excise duty.

It is being demanded that the government must reimburse the R&D costs to domestic telecom firms. The state run ITI has also said that the government should also provide funds for native telecom R&D by ITI and CDOT for improvement of facilities.

Recently TRAI came up with a re consultation paper after the Chinese telecom equipment controversy asking how to increase the growth the telecom equipment manufacturing in India locally.

Demand for telecom equipments has crossed over trillion Rupees due to the growth in the wireless services market. However, growth of equipment production in India has not been proportionate to this growth in the wireless services market.

Vihaan Networks, an Indian telecom equipment manufacturer has stated that special incentives and tax concessions would help in promoting telecom products. An income tax holiday should be granted for these for 10 years and excise duties for manufacturing in India should be reimbursed.

Equipment producers have also told the government should encourage the research and development and offer soft loans and grants for these purposes.

Bajaj Auto is joining hands with Renault to build a small car to challenge the status of Tata Motor’s Nano as the world’s cheapest car. The new car is expected to hit Indian roads by 2012.

Though the aim is to make an affordable car to the millions of middle-class Indians, at present using two-wheelers, Bajaj Auto clarified that the stress would be on fuel efficiency and eco-friendliness rather than on its price. The expected price tag of the new car is $2,500 (Rs. 1.12lakh).

Tata Motor’s Nano took the world by storm with its low pricing. The car sells for Rs. 1.23lakh to 1.72lakh ($2,700-3,800) and is now the holder of the world’s cheapest car title.

Rajiv Bajaj, MD, Bajaj Auto said that the low-pricing is only ‘one part of the equation’ and not the only attraction. “Our intention is to do a path breaking job with fuel economy,” he added. “We remain very clear whether the car is 100,000 rupees or 150,000 rupees is not what’s important. What counts just as much are mileage, maintenance and carbon emissions.”

Mr. Bajaj made clear the company’s goal of providing a four-wheeler, its cost so low that it will motivate two-wheeler owners to switch over. He said, “Our aim is to deliver mileage of 30 kilometers to a liter of fuel.” Nano runs with a mileage of 23.6 kilometers a liter. However, the average mileage of small cars in India is around 18 kilometers per liter.

Bajaj also plans to keep carbon-dioxide emission level in double digits, while Nano’s is 101 gm/km.

New Delhi- A government website announced on Saturday that auction for countrywide licenses in India’s sale of speedy 3G network have reached 2.65 billion dollars.

On Friday a bid of 120.69 billion rupees (2.65 billion) which was approximately 3.5 times the 35 billion rupee reserve rate declared by the government for an all-India slot.

Auction was believed to start off at 122.52 billion rupees even though closing numbers for Saturday are still awaited.

Nine mobile operators, inclusive of the country’s market leaders Bharti Airtel and Reliance Communications, are in the fray to bid for 3G airwaves which increased its customer base by an astounding 20.31 million.

The revenues from the auction that commenced on April 9, is slated to be a significant contributor towards refilling the gaping deficit in the budget.

The government is slated to earn more than 500 billion rupees in the bidding of 3G spectrum and a subsequent retailing of broad band airwaves announced Telecom Minister A. Raja.

Analysts feel that the bidding will be reaching the final stage and will end in a few days.

The sale, where in mobile companies are battling for very less spectrum space in the world’s fastest growing cellular market is believed to have pushed India into the Internet era.

There are approximately half a billion cellular consumers in the nation, of them only a fraction has Internet access through computers. Because of 3G network people will get speedy access to the internet through their mobiles.

Due to already fierce price competition in the over crowded cellular market, the 3G will put a lot of pressure on the financial aspect of India’s mobile manufacturers , believe analysts.

KPMG telecoms analyst Roman Shetty informed AFP that there won’t be any immediate revenues, also forecasting that mobile companies will only earn profits after 4-5 years after the decongestion of Indian market.

The huge amount involved have also diverted attention towards government decision 2 years back to confer 2G licenses on a “first-come, first-serves” basis instead of going in for auction. The Telecom Authority of India was given a cold shoulder when it suggested an auction.

Opposition leaders have alleged corruption and malpractices in the marketing of 2G licenses and have demanded that communications minister A. Raja should resign.

The involvement of few office bearers from the ministry and private companies is being investigated by Nation’s Central Bureau of Investigation.

Due to the suspected charges of irregularities in bestowing licenses, they raided offices the previous year.

For the first time in 19 years since the winds of liberalization blew across the Indian economic landscape, government seems serious about reducing the fiscal deficit. The state of affairs was brought to a head by the stimulus packages inducted into the economy to help it tide over the global economic slowdown.

The Finance Minister in a rare show of commitment towards the cause, brought about measures like scaling down subsidies, tax increases and state asset sales to narrow the deficit gap from 6.9% of GDP to 5.5%. Both fertilizer and fuel subsidies were brought under the ambit of Budget and the subsidies cut down to bring in additional revenue.

By raising the tax rates and restoring the excise duties to pre-recession days, the Finance minister is eyeing for more revenue. By selling the state assets in PSUs, the FM plans to bring in an extra 400 billion rupees. All these measures are expected to reduce the debt burden to 82% of the economy.

These calculations are based on certain assumptions, which may fall through in adverse economic climate. In fact, Indian economy was cruising along well on recovery path in 2007-08, when the deficit decreased to 2.7% of GDP. The strong gale in the form of global recession forced the economy away from its path. The government was compelled to introduce stimulus measures to save economy, which did serious damage to the burgeoning fiscal deficit. And, there is no guarantee that this will not happen again.

The Finance Minster has juggled figures to make it appear attractive as of now. How much of these measures are practically possible remains to be seen. If government is serious in tackling the deficit issue, it should have a stand-by plan to cushion the economy in case of failure of present steps.