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The increase is largely based on the government's expectation of one-time spectrum charges from existing telecom operators, spectrum auction and higher dividends and profits from nationalised banks, financial institutions and the Reserve Bank of India (RBI).
The government is banking heavily on income from dividend or surplus from RBI, nationalised banks and financial institutions. Receipts under this head is expected to bring in Rs 43,996.24 crore during 2013-14, against the revised target of Rs 25,446.75 crore in the current financial year. The government, in the previous Budget, had targeted earnings to the tune of Rs 22,974.30 crore from this.
Dividends from public sector enterprises and other investments are targeted at Rs 29,870.12 crore in 2013-14, slightly lower than the revised estimate of Rs 29,996.09 crore in 2012-13. Receipts from other communication services are expected at Rs 40,847.05 crore in 2013-14, more than double that of Chidambaram's revised estimate (Rs 19,440.67 crore) in 2012-13. Most of the receipts under this head actually came from annual spectrum charges and licence fees and just Rs 1,706 crore from the auction of 1800 MHz spectrum auction in November 2012 for the current financial year.
Receipts from other communication services mainly relate to one-time spectrum charges levied according to the recommendations of the Telecom Regulatory Authority of India, auction of 1800 MHz and 900 MHz spectrum and receipts from 800 MHz spectrum, annual spectrum fees and licence fees collected from telecom operators.
In the previous Budget, the government had targeted to earn Rs 58,217.33 crore in 2012-13 from other communication services, which the government could not achieve as the auction of the 1,800 MHz spectrum band in November 2012 received lukewarm response with key circles failing to attract bidders because of the high reserve price. The 800 MHz band also failed to get bidders in November 2012.
Though the department of telecommunications (DoT) had issued demand notices for Rs 23,000 crore to some telcos, namely, Bharti Airtel, Vodafone and BSNL, for the one-time spectrum charge in January this year, the government is yet to receive any money as the operators have contested the matter before the Supreme Court.
Speaking at a press conference, Chidambaram said, "We have got a written statement from DoT that divides the spectrum revenue into licence fee, revenue sharing, the one-time fee and quantity of spectrum that will be auctioned. After they have given us in writing that how the cash will flow, we have taken them into account. But, if there are any unexpected developments, we will have to factor them later."
In a second attempt to auction spectrum under 1,800 MHz, 900 MHz and 800 MHz bands, the government had reduced the base price substantially, but there was no bidder for 1,800 MHz, while it could not go ahead with the auction process of the 900 MHz band as the existing operators have contested it before the Delhi High Court.
"Chidambaram has set a dangerous target. The government should have learnt from the response it had received from the telecom operators in the recent past. No operator showed interest in taking spectrum at such high reserve price. Also, the one-time spectrum fee issue is before the Supreme Court. The government may not get this money during the budgetary year," said Rajan S Mathews, director general, Cellular Operators Association of India.
In other words, the government may again fail to achieve the target of Rs 40,847.05 crore, like the previous year.
The non-tax revenue of the government includes revenue receipts from sources such as return on assets in the form of dividend and profits, interest, fees, fines and receipts collected in the exercise of sovereign functions, regulatory charges and licence fees, and user charges for publicly provided goods and services.
