Companies & Sectors
TRAI’s green telecom efforts not sufficient, say experts

The telecom industry is receiving incentives and subsidies as part of the efforts to reduce the carbon footprint, but it is not doing enough in the major areas

The Telecom Regulatory Authority of India (TRAI) last month published a consultation paper on "Green Telecommunications" addressing various aspects like carbon footprints for the telecommunications industry. But, industry experts are questioning the incentives and subsidies provided to the sector to push the green agenda.

Professor Girish Kumar, of IIT Bombay, who has been undertaking research on the harmful effects of electro-magnetic radiation (EMR), asks: "Why does industry want incentives for green telecom? Is it not our duty as Indians to not pollute our own country? Should we not care for our people and environment?"

The paper says there are 3.1 lakh towers and about 60% of the power requirement is met through diesel generators and the rest is fulfilled by power from the grid. But Mr Kumar insists that there are more than 4.5 lakh towers in the country as of 2011 and that due to shortage of power nearly 59% of the requirement is met through diesel generators and this causes pollution.

He also pointed out that telecom operators enjoy unnecessary subsidy on diesel. He explained that telecom operators get Rs7 per litre subsidy on diesel. Since their consumption of diesel is 2 billion litres every year, they get a subsidy of Rs1,400 crore per year.

Mr Kumar suggested that the numbers of diesel generators can be reduced if power requirement is curbed by optimising telecom systems. The transmitted power from cell towers must be reduced from 100W to 2W, which will also help to control radiation.

Mr Kumar said, "The government should adopt immediate policy measure to reduce the transmitted power to a maximum 1W to 2W, so the energy requirement will be substantially reduced. Due to low energy requirement, there will be no need for cooling of the high-power amplifier, and thereby air-conditioning would also not be required in most of the cases and then this reduced power requirement can be provided through solar or other renewable energy."

Mr Kumar also raised the issue of the operators' demand for self-regulation of the industry. Telecom operators present for the discussion on the consultation paper had said that the government should try to regulate everything and operators must be allowed to self-certify that they are meeting all norms.

Mr Kumar said operators should not be allowed self-certification and that the government should introduce stringent policies and third-party monitoring of radiation levels and air pollution levels near cell towers. "Heavy penalties should be slapped in case of any violation as it is directly related to the health of people, birds, animals and the environment," he said.

Activist Jehangir Gai, said, "There should be an independent and competent third party regulation." Mr Gai explained, "Assuming that the telecom companies say that there are no health hazards, then of course there are some. Even if there is no conclusive study proving the health hazards due to cell towers, necessary precautions should be taken. It is always better to be on the safer side."

Moneylife has reported on the health hazards arising out of cells towers and the negligence on the part of the government to look into the issue. (Read 'Cell towers violate health and safety norms' , and 'DoT group proposes low radiation levels for cell towers' )

Mr Kumar said it is not enough for service providers to move indoor base transceiver stations (BTS) to outdoor BTS, switch off a few transmitters, and to adopt an automatic frequency plan and air cooling instead of air-conditioner to reduce carbon footprint.

He also recommended that telecom service operators emphasise on research and development to develop solutions, and that the government should come up with rules for 90% of telecom-related products to be manufactured in India, which would also help create millions of jobs in the country. (Also read,'Industry does not want to spend on more cell towers that will lower radiation'. )


Domestic natural gas users to be burdened with higher price

An inter-ministerial panel on gas pricing, which met today, agreed on the need to charge more from users of domestic natural gas so that imported liquefied natural gas (LNG) can be made affordable. However, the power ministry wants more discussion on the rationale to average out or pool price of costlier imported LNG with cheaper domestic gas

New Delhi: An inter-ministerial panel today agreed on the need to charge more from users of domestic natural gas so that imported liquefied natural gas (LNG) can be made affordable, reports PTI.

The inter-ministerial committee, headed by Planning Commission advisor (energy) Sunanda Sharma, today held it first meeting on subsidising costlier imported LNG by making consumers of cheaper domestic natural gas pay more.

"The meet discussed the need for such a move and all except the representative of power ministry agreed on the need," a source privy to the deliberations said.

The power ministry wanted more discussion on the rationale to average out or pool price of costlier imported LNG with cheaper domestic gas, the source said.

More deliberations will follow and various sub-groups on working out modalities, tax implications, etc, will be formed.

The panel was constituted after Petronet LNG, India's largest liquefied natural gas importer, contracted LNG from Australia at a price that is four times the rate at which most of the natural gas produced from domestic field is sold.

Australian LNG, which is to be imported at Petronet's under construction Kochi terminal in Kerala from 2014, is indexed at 14.5% of crude oil price-the loading price at Australian port will be $14.5 per million British thermal unit (mmBtu) at $100 a barrel oil price.

After adding $1-$1.2 per mmBtu towards cost of shipping, the gas in its liquid form in cryogenic ships to Kochi, 5% customs duty ($0.77 per mmBtu) and cost of converting the LNG into its gaseous state, the gas ex-Kochi will cost about $17 per mmBtu.

This compares to $4.2 per mmBtu price of majority of gas, the source said, adding the panel will suggest how these two prices can be pooled or averaged out to make the gas affordable to power and fertiliser units in Kerala.

However, the constitution of the committee has come in for questioning by some quarters, who say inclusion of officials of Petronet, a private company, and state-owned gas utility GAIL are a conflict of interest.

Petronet and GAIL, which is a promoter of Petronet and principal marketer of the Australian LNG, are naturally inclined towards price pooling.

Instead, upstream regulator Director General of Hydrocarbons (DGH), they say, should have been co-opted as member of the committee so as to detail the implication and complication of such proposal on contracts of the fields awarded under New Exploration Licensing Policy.

The inter-ministerial panel includes representatives of power, fertiliser, finance and oil ministries, GAIL India chairman, Petronet CEO, Petroleum and Natural Gas Regulatory Board secretary and Oil & Natural Gas Corporation (ONGC) director finance.

Previously, GAIL had commissioned a study by Spanish consultant Mercados on the feasibility of pooling of over a dozen different rates at which natural gas produced from different fields in the country is sold.

The price for domestic natural gas ranges from $2.71 to $5.73 per mmBtu, LNG imported from Qatar on long-term contract is currently imported at $6.92 per mmBtu and from spot market at $8.50-$9.50 per mmBtu.

Sources said the terms of reference (ToR) of the committee have been tweaked to omit the previously indicated objective of rationale for pooling of gas.

The ToR in the present form pre-suppose that the decision of a pooled price has already been taken and that the committee was only to devise pool operating guidelines, without even evaluating the various options.

Mercados had suggested separate pools for fertiliser and power sector and involved several complex inter-ministerial issues.

The Inter-Ministerial Committee will formulate a policy for pooling of natural gas prices and devise pool operating guidelines to make the policy operational.

Petronet LNG, India's largest importer of liquefied natural gas, has contracted 1.5 million tonnes a year of LNG from Australia for delivery at its under-construction Kochi terminal in Kerala from 2014-end.

The natural gas produced by state-owned ONGC and Reliance Industries, which together account for over 80% of gas in the country, is priced at $4.2 per mmBtu.


No venture fund has approached IT department for tax exemption

An RTI query recently, alerted the IT department to the strange fact that no venture fund, which can get tax exemption for earnings, has approached the department for tax clearance

The Income-Tax Department is initiating an investigation to check if venture capital funds (VCF), regulated by the market watchdog, Securities and Exchange Board of India (SEBI), have complied with income-tax regulations mandatory under the law to be able to claim tax exemption as VCFs. I-T department sources have confirmed to Moneylife that an investigation is underway to determine why VCFs have not registered with the IT department.

The IT department was alerted to this issue when a Right to Information (RTI) application was filed, seeking the number of VCFs which have been cleared by the IT department. Surprisingly, while replying to the RTI query, the department discovered that no VCF had sought its clearance so far.

Currently, for the purpose of tax exemption, VCFs have to comply with the income-tax rules under Section 10 (23FA) of the Income-Tax (I-T) Act. Section 10 (23FB) of the I-T Act provides tax exemption for "income from investment in venture capital undertaking."

But it is only after the RTI query that the I-T department woke up and started an investigation into why VCFs registered in India have not taken permission from the tax authorities.

As per the information available on SEBI's website, there are as many as 180 registered venture capital funds and 154 registered foreign venture capital funds in India. At present, venture capital activity in India comes under the purview of different sets of regulations.

The SEBI (Venture Capital Funds) Regulation, 1996, lays down the overall regulatory framework for registration and operations of venture capital funds in India. Overseas venture capital investments are subject to the Government of India Guidelines for Overseas Venture Capital Investment in India dated 20 September 1995.

For tax exemption purposes, venture capital funds also need to comply with Income-Tax Rules under Section 10(23FA) of the Income-Tax Act. However, no venture firm has approached the IT department, according to a senior IT official.


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