According to a survey, even though the telecom industry in India recorded a growth of 20 per cent even during recession, it has only show only a meager growth of 2.5 per cent as the tariff wars continue to cause a major dent in the revenues of the telecommunication operators in the year 2009-10.

A Voice & Data report, which is the industry journal has said “Intense tariff war caused the steep fall and overall slowdown in the performance in all segments, including cellular services that over the past several years have been leading the growth in earnings for the telecom services sector.”

The report added that during the last year the industry had posted a revenue of Rs155,683 crore. However the telecom industry has succumbed to the competitive forces within the industry in the year 2009-10 and there by posting revenue of only Rs 159,510 crore and showing a modest growth of 2.5 per cent.

Radio trunking business, cellular, VSAT, fixed line, ILD (international long distance), broadband and NLD (national long distance) constituted to the report posting their revenue figures.

The current predomination operators were forced to re-look at their charges and rates with newer players introducing tariffs at one paisa per second and very competitive rate plans.

The mobile services sector has posted revenue of only Rs. 96,860 crore with a growth of 3.6 per cent even with an increase in the number of subscribers to around 50 per cent.

With close to 100 per cent penetrations in the top cities of the country, the current growth is only due to the mobile services penetrations in the rural areas, with almost three firths of the new additions coming form rural areas. Reliance, Bharti and Vodafone, India’s largest mobile service provides now have a client base of over 100 million each.

Despite of the growth in the mobile sector, the other sector of telecom, the fixed line sector in the country has shown a decline of revenues and number of users in 2009-10. Its revenues in 2009-10 was at Rs 18,900 crore and decline in the number of users was by 23.3 percent with a dwindling customer base of 36.96 million currently.

The Chief Editor of CyberMedia India, Prasanto K Roy has said, “This is the worst telecom services revenue growth in the last five years. More tariff wars are not sustainable. There is likely to be consolidation ahead which should arrest more tariff wars and revenue attrition.”

He has also added, “The 3G rollout and rising broadband penetration, including wireless broadband, will help improve service revenue, but the impact of these will be felt more in fiscal 2011-12 than in this year.”

Rural Development Ministry Secretary B K Sinha appealed to India Inc, to invest in the rural development sector to bring sustainable growth in rural areas. He requested corporate to participate in the Mahatma Gandhi National Rural Employment Guarantee Act (NREGA) and self-employment program Swarnajayanti Gram Swarojgar Yojna (SGSY). He also suggested creating partnership with the government in its training and skill development programmes. To improve infrastructure in rural areas he also suggested corporate to participate in the Pradhan Mantri Gram Sadak Yojna (PMGSY), which develops road constructions in rural areas. He further said that support could be provided to Panchayati Raj Institutions and all such work can be done under their Corporate Social Responsibility.

Addressing a national summit on rural development organised by the CII, CII Director General Chandrajeet Banerjee said, “CII is committed to this area of work…two decades ago, we felt that industries need to get involved, not for charity but business.” He also said that a large number of corporate was showing interest in the development of rural areas. And by forging partnership with the government there is huge opportunity for development in the rural areas.

The drastic price increase in essential commodities has affected people in both urban and rural areas. But the finding by state Economic Survey shows rural areas was hit badly by the increase in food prices. According to the state Economic Survey, during the last five years, Maharashtra saw over 50 percent rise in many essential commodities, which adversely affected mostly rural areas. Price rise was mainly in essential commodities such as rice, wheat, tur dal, moong dal, potato, onion and sugar.

According to the survey, “About 50 per cent and more hike was seen in tur dal, moong dal, potato, sugar, jaggery and onion prices. About 25 to 50 per cent rise was observed in prices of Urid dal, masur dal, garlic, turmeric powder and up to 25 per cent of hike in rice, bajra, milk, ghee, eggs and fish.” The rural part of the state, recorded a rise of 23.5 points which was two points higher than its urban counterparts. “The Consumer Price Index (CPI) i.e. prices of retail transactions, for rural areas in April, 2009 was 149.3, which continuously increased and reached 172.8 in December, 2009, thus recording a rise of 23.5 points which was the highest in last five years,” the survey said. While the urban areas recorded only about 21.8 points.

Banks should display more faith in rural India and increase their lending to small rural enterprises. This and only this can bring about the final transformation of the country. This was the message sent out by Anand Sharma, Minister of Commerce and Industry while addressing the India Rural Business Summit and Exhibition organized by FICCI together with the Department of Commerce, Ministry of Commerce and Industry.

Mr. Sharma said, “The banks become reluctant when it comes to lending to the poor on the account of issues such as what would be the collateral and security. That mind-set has to be changed.” He added, “These are the people who have to be given opportunities because it is not that poor people are not creditworthy. You have to give them credit and then check their creditworthiness.”

The minister said that the credit worthiness of rural enterprises is high with minimal chances of default. He stressed the need to integrate rural areas with the mainstream to achieve the projected economic growth of the country. He said, “If we are to ensure that growth is both inclusive and equitable then we will have to align and integrate our rural areas with the economic processes.”

Mr. Sharma opined that with India’s 70% population living in villages and dependent on agricultural for sustenance, this sector need to be given more importance. He said that Department of Commerce is promoting rural enterprises through Special Focus Initiatives devised for labor-intensive sectors such as agriculture, handlooms, handicrafts and leather products.