3G auction closes; pan-India licence bid touches Rs16,828 crore

The government will mop up Rs70,000 crore from the auction, double the amount it expected to collect

Auction for third generation (3G) licence ended today, with bids for the pan-India licence touching Rs16,828 crore that ensures the government a revenue of Rs70,000 crore—double the amount it expected to collect, reports PTI.

According to sources, Bharti, Idea and Vodafone Essar have won in some of the circles in the auction that lasted 34 days. However, details of who have secured all-India licence are awaited.

As per the latest figures, the pan-India licence bid touched Rs16,828 crore compared to the reserve price of Rs3,500 crore.

With the close of auction for 3G telephony spectrum, the government would commence the auction for Broadband Wireless Access (BWA) spectrum in two days.

Nine leading mobile operators, including Bharti Airtel, Vodafone, Reliance Communications (RCom) and the Tatas, had entered the auction to grab spectrum for 3G services, which would allow users to access high-speed data downloads on mobile phones.

Slots were only available for three operators in most states, while four were available in Punjab, Bihar, Orissa, Jammu and Kashmir and Himachal Pradesh.

The government had estimated raising Rs 35,000 crore from sale of spectrum for 3G as well as Broadband Wireless access (BWA) put together.

But with auction for BWA spectrum yet to begin, the revenue mop up could go up further.

Besides Delhi and Mumbai, Bharti has got 3G spectrum in Andhra Pradesh, Karnataka, Tamil Nadu, UP (West), Rajasthan, West Bengal, Himachal Pradesh, Bihar, Assam, North East and Jammu and Kashmir.

The company, however, lost out in Punjab, from where company promoter Sunil Mittal hails.

RCom would be able to offer 3G mobile services in Rajasthan, Madhya Pradesh, West Bengal, Himachal Pradesh, Bihar, Orissa, Assam, Kolkata, Punjab, North East and Jammu and Kashmir, other than Delhi and Mumbai.

Vodafone-Essar has succeeded in Maharashtra, Gujarat, West Bengal, Tamil Nadu, Kolkata, Haryana, UP (East). The telecom major also bagged Delhi and Mumbai.

Tatas, who have been denied 2G spectrum in Delhi, also lost out on 3G spectrum in Delhi. They, however, managed to get a slot in Maharashtra, Gujarat, UP (West), Rajasthan, Karnataka, Kerala, Punjab and Haryana.


I-T dept to launch new taxpayer schemes this year

The I-T department is planning to set up an independent TDS directorate; faster processing of tax returns and technological upgrade of tax refunds are also on the anvil

With the present Income Tax (I-T) Act proposed to be replaced by the Direct Taxes Code (DTC) next year, the I-T department is planning to introduce a host of services related to processing of tax returns and refunds in the current fiscal, reports PTI.

The department will also observe 150 years of the introduction of the first ever I-T Act in 1860, as it will celebrate the 'Income Tax day' on July 24 this year.

The event is likely to be inaugurated by finance minister Pranab Mukherjee, who will also lay out a roadmap of the department for the future.

"This is the last year of the 1961 Income Tax Act. This year, a number of taxpayer programmes of the department can be initiated and completed," CBDT member (revenue) Durgesh Shankar said.

The department, this fiscal, is planning to set up an independent Tax Deducted at Source (TDS) directorate while fast processing of tax returns and technological upgrade of tax refunds are the other core issues, he said.

The revenue accrued from TDS has been constantly growing over the years and with the increase in the number of service organisations across the country, the share from under this category of taxes is bound to grow, Shankar said.

According to estimates, the TDS revenue contributes almost 40% to the direct taxes kitty.

Programmes like the Refund Banker scheme, presently on in 15 cities of the country, will also be extended to other locations this fiscal.

The DTC, aimed at simplifying the tax structure, is proposed to be introduced in April next year and will ultimately replace the Income Tax Act, 1961, bringing all other direct taxes, including wealth tax, under its purview.

Mukherjee had said that if a reasonable level of discussion happens on the code, a bill could be placed in the winter session of Parliament.

According to finance ministry records, the first I-T Act was introduced in India in 1860 by James Wilson who became the first finance member of the country. This became necessary since suppression of the 1857 struggle entailed heavy expenditure and made a large addition to public debt.

The Act received the assent of the governor general on 24 July 1860. It came into effect immediately and was modelled on the English Statute.





Talent crunch hampers international growth of the Indian animation industry

Hollywood is increasingly knocking at the doors of Indian animation studios, but the industry is suffering from high tax rates, dearth of talent and lack of international focus

Indian animation studios are doing a lot of work for Hollywood productions. But why is the Indian animation industry not making any kind of a mark on the international front? Despite great opportunities at hand, the industry continues to remain the back-office of the world as far as animation is concerned.

In India, although several animated films were to be released in 2009, they didn’t make it to the screens because of limited screen space and lowered risk appetite of production studios. Pre- and post-production animation work is mostly driven out of US and Europe, but the script-to-screen journey with a ‘Made in India’ stamp may just take a little longer. 

P Jayakumar, CEO, Toonz Animation India, spoke on some bottlenecks which are hampering the growth of the industry. He told Moneylife, “Primarily, the domestic market is a growing one and as such is not established. There is apprehension about how people would take to a particular animated movie, which deters investors. Secondly, lack of skilled animation professionals impacts quality in-house productions. Animation institutions currently produce software professionals who can use the tools of animation, but are not creatively-inclined individuals who understand the nuances of animation from script-to-screen (production).”

Jehil Thakkar, executive director, media and entertainment, KPMG echoed the same views, “We are not equipped to make an end-to-end product. We won’t be able to make another Toy Story.”

Apparently, outdated animation content is literally dumped on Indian networks as there are no potential buyers for domestic content in India. Mr Jayakumar added, “As a growing industry and in the backdrop of a growing market, the emphasis is on producing movies that base themselves on familiar themes—and mythology is an area where the focus is. This may not suit the international market where a general theme may work well.”

The government is doing its bit, but taxation is also killing the industry. The ministry of information and broadcasting is looking at making it mandatory for all children’s channels to telecast local animated movies on a daily basis during specific slots. 

However, the entertainment tax rate—which is different from state to state—varies from 20% to 40%. If you look at Asia, entertainment tax is almost 3% in Japan and Singapore; 7% in Thailand and zero in Hong Kong.

The Federation of Indian Chambers of Commerce and Industry (FICCI) has requested the government for an exemption of entertainment tax on all animation feature films and movies meant for children. Mr Thakkar explained, “I think the waiver is warranted to improve this industry. This will surely help in raising the standards (of the animation industry) across all media platforms.”

The animation and visual effects segment of the entertainment industry registered a growth of 13.6% in 2009 and is expected to grow at a CAGR (Compounded Annual Growth Rate) of 18.7% in the years to come to attain Rs4,660 crore by 2014.

Most of the business will depend on outsourced work and co-production deals. But the fact remains that US studios are falling back on Indian talent. According to media reports, companies like Fox, Walt Disney and Warner Bros are using domestic talent to produce Indian-language films. India sold more than 3.2 billion movie tickets in 2009, which amounts to more than double that of the box-office sales in the US and Canada combined, in terms of number of tickets sold. Mr Jayakumar added, “To sum up, I think it’s not too far when we will see Indian studios churning out animated content for the international market.”





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