Spectrum auction flop not to impact fiscal math: Nomura
Japanese brokerage Nomura on Friday said there will be a Rs 32,000-crore shortfall in revenue accretion because of the disappointing spectrum auctions, but it woould not affect the overall fiscal math of the government.
Mumbai: Japanese brokerage Nomura on Friday said there will be a Rs 32,000-crore shortfall in revenue accretion because of the disappointing spectrum auctions, but it would not affect the overall fiscal math of the government.
The higher-than-expected growth in indirect tax collections and revenue mop-up (around Rs 30,000) under a tax amnesty scheme will help the treasury, it said.
The budget has accounted for revenues of Rs 99,000 crore from the telecom sector, including Rs 64,000 crore from the new telecom auctions, Rs 20,000 crore from recurring licence fees and Rs 15,000 crore from deferred payments for previously conducted sales.
The lack of interest shown by telcos in the five-day long auction concluded yesterday will result in the government collecting only Rs 67,000 crore, leaving a gap of Rs 32,000 crore which is 0.2 per cent of GDP.
But, the brokerage was quick to add that this would not affect the fiscal math, which will be supported by the larger than expected indirect tax mop-up which will help the government maintain the deficit at the budgeted 3.5 per cent of GDP.
It said indirect tax revenue has been up 27 per cent in the April-August period as against a budgetary target of 10 per cent growth. The Rs 15,000-crore to be collected from the tax amnesty scheme which ended earlier this month will also help the fiscal arithmetic, Nomura said.
As against a target of netting at least Rs 5.68 lakh crore, the government could garner only Rs 65,879 crore as telcos stayed away from the 700 MHz band due to high reserve price of over Rs 11,000 crore.
The lack of interest in the 700 MHz band, which can help support services in the high growth data segment, alone drilled a hole of over Rs 4 lakh crore in the government calculation.
Nomura said even if the government agrees to the telcos' demand of doing a fresh auction of spectrum in the 700 MHz band at a lower price, the sale is unlikely to happen in this year.