Trai looks at telcos, cable ops for funding

NEW DELHI: In a bid to break the government's financial hold over it, telecom and broadcast & cable regulator, Telecom Regulatory Authority of India (Trai), has suggested that it be allowed to keep a certain percentage of the annual license fee paid by the telecom service providers and cable operators to the government.

This would help the organisation, Trai has argued, to fund its various activities and also give it financial autonomy, the likes of which are enjoyed by other regulatory bodies like the Insurance Regulatory and Development Agency (IRDA) and the Securities Exchange Board of India (SEBI).

At present, all expenditure of Trai is met through grants from the government, which are made available through the department of telecommunications.

Contacted by, a senior official of the I&B ministry expressed surprise that such a move has been made, but hastily added, "We'll study the proposal and further concur with our counterparts in the telecom ministry before taking a view on the matter."

In a statement put out on its website today, Trai has said that an annual share of 0.05 per cent on the revenue base of telecom service providers and cable operators would help it meet its recurring expenditure and also have a provision for capital expenditure.

The revenue base of the telecom service providers is about Rs.550,000 million and that of the cable service providers is about Rs.150,000 million.

Pointing out that Trai's jurisdiction rides over sectors falling under two separate ministries --- ministries of communication & IT and information and broadcasting --- the regulator has said a new funding process would avoid any clash about one ministry funding the activities of another.

The Trai Act provides legal authority to the organisation to frame regulations for levying fees and charges as a source to generate its own fund and keep the proceeds in the Trai General Fund.

According to information available, in 72 countries, the revenue of the telecom regulatory bodies is derived from various types of fees and charges.

Though Trai officials refused to comment on the fact as to the delay in putting such a proposal for the government's consideration, sources in the organisation said certain developments in the finance ministry, relating to financial prudence, may have acted as a catalyst.

According to the Guidelines on Expenditure Management Fiscal Prudence and Austerity, issued by the ministry of finance on 24 September 2004, most autonomous bodies (like Trai and Prasar Bharati) are given 100 per cent deficit grants, which shall be reduced in a graded manner by 5 per cent in successive years.

This means 95 per cent in the first year, 90 per cent in the second year and so on, in respect of such bodies which have the potential of raising resources.

At present, the annual expenditure of Trai is approximately Rs.100 million and this is likely to increase this year because of additional functions of television and broadcasting regulation assigned to Trai some time back, it

has been contended.

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