Union Cabinet approves auction of spectrum; here are other key decisions

Union ministers Ravi Shankar Prasad and Prakash Javadekar brief press on CCEA decisions, at National Media Centre in New Delhi on December 16, 2020. (PC-PTI)

The Union Cabinet and the Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, on December 16 approved a proposal of the Department of Telecommunications to conduct spectrum auction and assistance of about Rs 3,500 crore for sugarcane farmers, among other key decisions.

The decisions were announced to the press by Union ministers Ravi Shankar Prasad and Prakash Javadekar.

Here's a look at the key decisions

1) Auction of spectrum: After four years, the government is set to auction telecom spectrum, at a time when receipts from such auctions are much needed when tax and other sources of revenue are hit due to the COVID-19 pandemic.

The Union Cabinet, on December 16, approved the auction of 2,251 megahertz of spectrum by the end of FY2020-21, Telecom Minister Ravi Shankar Prasad said.

“In total 2,251 mhz will be put for auction. We will be auctioning spectrum in the 700, 800, 900, 1800, 2100, 2300 and 2500 mhz bands,” Prasad said at a media briefing.

“This month itself we will issue notices inviting applications, and the auction will be carried out in March,” Prasad said.

In the Union Budget 2020-21, the government had targeted a revenue of Rs 1.33 lakh crore from telecommunication services, which includes spectrum auction proceeds, licensing fees and other receipts. In 2019-20, the centre received Rs 58,990 crore in telecommunication revenues, versus a budgeted target of Rs 50,520.

“Spectrum will be offered for assignment for validity period of 20 years. A total of 2251.25 mhz is being offered with total valuation of Rs. 3.92 lakh crore (at reserve price),” said an official statement.

2) Assistance of about Rs 3,500 crore for sugarcane farmers: The CCEA approved a subsidy of Rs 3,500 crore to sugar mills for the export of 60 lakh tonnes of the sweetener during the ongoing marketing year 2020-21.

"Cabinet has taken the decision to help farmers directly by depositing money of subsidy into their accounts. The subsidy will be given on 60 lakh tonnes of sugar exports at the rate of Rs 6000 per tonne," Union Minister Prakash Javadekar said.

The minister said both "sugar industry as well as sugarcane farmers are in crisis" because of high domestic production at 310 lakh tonnes as against the annual demand of 260 lakh tonnes.

Javadekar said the decision will benefit 5 crore farmers.

3) MoU between India and USA for exchange of information in the electricity sector: The government also approved the Central Electricity Regulatory Commission’s (CERC) proposal for entering into a MoU between the CERC and US's Federal Energy Regulatory Commission (FERC). This MoU is for exchange of information and experiences in areas of mutual interest to both in the electricity sectors.

Through this MoU, the government is aiming at improving regulatory and policy framework for developing efficient whole sale power market.

4) Revised cost estimate for North Eastern Region Power System Improvement Project: For this project, the Union Cabinet approved the revised cost estimate of Rs 6,700 crore. The government sees this as a major step towards economic development of the North Eastern Region through strengthening of Intra - State Transmission and Distribution systems.

The scheme is being implemented through POWERGRID in six beneficiary North Eastern States namely, Assam, Manipur, Meghalaya, Mizoram, Nagaland, and Tripura. the Ministry of Power aims to commission this project by Decenmber 2021, after which it will be owned and maintained by the respective North Eastern State Utilities.