According to news reports, the Prime Minister recently chaired a meeting with ministers to discuss an alternative plan (“Plan B”) for the National Food Security Bill, 2011 (hereinafter “Bill”).  The Bill is currently pending with the Standing Committee of Food, Consumer Affairs and Public Distribution.  It seeks to deliver food and nutritional security by providing specific entitlements to certain groups.  The alternative proposal aims to give greater flexibility to states and may bind the centre to a higher food subsidy burden than estimates provided in the Bill.  It suggests changes to the classification of beneficiaries and the percentage of the national population to be covered by the Bill, among others. Classification of beneficiaries The Bill classifies the population into three groups: priority, general and excluded.  Individuals in the priority and general groups would receive 7 kg and 3 kg of foodgrain per person per month respectively at subsidized prices. Plan B suggests doing away with the priority-general distinction.  It classifies the population on the basis of 2 categories: included and excluded.  Those entitled to benefits under the included category will receive a uniform entitlement of 5 kg per person per month. Coverage of population Experts have suggested that the Bill will extend entitlements to roughly 64% of the total population.  Under the Bill, the central government is responsible for determining the percentage of people in each state who will be entitled to benefits under priority and general groups. Plan B suggests extending benefits to 67% of the total population (33% excluded), up from 64% in the Bill.  The Ministry has outlined two options to figure out the number of people in each state that should be included within this 67%.  The first option envisages a uniform exclusion of 33% in each state irrespective of their poverty level.  The second option envisages exclusion of 33% of the national population, which would imply a different proportion excluded in each state depending on their level of prosperity. The Ministry has worked out a criterion to determine the proportion of the population to be included in each state.  The criterion is pegged to a monthly per capita expenditure of Rs 1,215 in rural areas and Rs 1,502 in urban areas based on the 2009-10 NSSO survey. Thus, persons spending less than Rs 40 in rural areas and Rs 50 in urban areas per day will be entitled to foodgrains under the alternative being considered now. Financial estimates Newspaper reports have indicated that the revised proposal will add Rs 7,000 to Rs 10,000 crore per year to the current food subsidy estimate of Rs 1.1 lakh crore.  According to some experts, the total cost of the Bill could range anywhere between Rs 2 lakh crore to Rs 3.5 lakh crore (see here and here).

The National Telecom Policy was adopted by the cabinet on May 31, 2012.  It was released in public domain later in June.  Among other things, the policy aims to provide a single licence framework, un-bundle spectrum from licences, and liberalise spectrum. Previously, the central government had decided to unbundle spectrum and licenses for all future licences on January 29, 2011.  TRAI too in its recommendation dated May 11, 2010 and April 23, 2012 sought to de-link spectrum from licences.  The Supreme Court in the 2G judgment had held that spectrum should not be allocated on a first-cum-first-serve basis and should instead be auctioned.  In the April 23 recommendations, TRAI has detailed the mechanism for auctioning spectrum. TRAI has also recommended moving to a unified licence framework under which a single licence would be required to provide any telecom service.  It has also recommended that spectrum should be liberalised so that any technology could be used to exploit it. The new policy is in line with the government decisions and TRAI recommendations discussed above.  The policy also aims to achieve higher connectivity and quality of telecommunication services.  Its key features are detailed below.

  • Licensing:  Presently, as per the 2003 Amendment to the 1999 Telecom Policy, there are two forms of licences – Unified Service Licence (to provide any telegraph service in various geographical areas) and Unified Access Service Licence (to provide basic and cellular services in defined service areas).  The new policy targets simplification of licensing framework by establishing a unified license for all telecom services and conversion to a single-license system for the entire country.  It also seeks to remove roaming charges.
  • Spectrum:  As of now spectrum bands are reserved on the basis of technology that may be used to exploit them.  For instance, the 900 and 1800 bands are reserved for GSM technology and 800 for use of CDMA technology.  The new policy seeks to liberalise spectrum.  Further, spectrum would be de-linked from all future licenses.  Spectrum would be refarmed so that it is available to be used for new technology.  The policy aims to move to a system where spectrum can be pooled, shared and traded.  Periodic audits of spectrum usage would be conducted to ensure efficient utilization of spectrum.  The policy aims at making 300 MHz of additional spectrum available for mobile telecom services by the year 2017 and another 200 MHz by 2020.
  • Connectivity: The policy aims to increase rural tele-density from the current level of approximately 39% to 70% by 2017, and 100% by 2020.  It seeks to provide 175 million broadband connections by the year 2017 and 600 million by 2020 at a minimum 2 Mbps download speed.  Higher download speeds of 100 Mbps would be made available on demand.  Broadband access to all village panchayats would be made available by 2014 and to all villages by 2020.  The policy aims to recognise telecom, including broadband connectivity, as a basic necessity like education and health, and work towards the ‘Right to Broadband’.
  • Promotion of domestic industry: The policy seeks to incentivise and give preference to domestic telecom products in procurements that (i) have security implications for India; or (ii) are for the government’s own use.  It also seeks to establish a Telecom Finance Corporation to mobilise and channelise finances for telecom projects.
  • Legislations: The policy seeks to review the TRAI Act to remove impediments to effective functioning of TRAI.  It also seeks to review the Indian Telegraph Act, 1885.  The need to review the Indian Telegraph Act, 1885 was also recognised in the 1999 Telecom Policy.

The policy as adopted can be accessed here.