NLD fee cut raises hackles at FinMin

New Delhi, Nov 13 | Updated: Nov 14 2005, 05:37am hrs
In a piquant situation, the finance ministry has raised objections over the manner of decision-making by the telecom ministry on the issue of cut in licence fee and revenue share announced by the latter for national long distance service operators.

The finance ministry is understood to have raised procedural objection to the licence fee cut by the communications ministry as it had non-tax revenue implications.

The ministry of finance is not objecting to the licence fee cut in this regard, but feels it should have been consulted before. If various ministries resort to such steps, there could be huge loss of revenue to the government, officials of the ministry said.

Royalties and licence fee of various ministries account for Rs 25,000 crore annually out of the total non-tax revenue of Rs 77,000 crore and, therefore, revenue implications should be studied before taking such decisions, officials said.

Department of telecom officials put the loss to the exchequer due to the licence fee cut at Rs 400 crore. DoT last week announced cut in entry fee in the national and international long distance segment to Rs 2.5 crore from Rs 100 crore and Rs 25 crore respectively.