In keeping with the Government’s promises, the Cabinet on Wednesday cleared spectrum trading guidelines and gold bonds along with gold monetisation schemes.
Under the spectrum trading guidelines telecom operators will be able to sell radio waves to other service providers, while the gold bonds along with gold monetisation schemes aim at tapping idle gold into the banking system and issuing sovereign bonds as an alternative to the precious metal.
As far as spectrum trading norms are concerned, the Government said that the move would help address the problem of spectrum shortage. “The Cabinet has approved spectrum trading. The telecom sector has been demanding it for optimum utilisation of spectrum,” Telecom Minister Ravi Shankar Prasad said here.
As of now only the Government is allowed to allocate spectrum to telecom firms through auctions. “The ownership right will be with the Government of India. We give right of use to operators through auction. That right of use can be traded between two service providers,” Prasad said.
The industry had been waiting for spectrum trading guidelines before proceeding with consolidation plans. Deloitte Haskins & Sells llP partner, Hemant Joshi said that spectrum trading would provide bigger players, who have congested networks, a chance to buy new spectrum and improve the quality of service for customers.
As far as gold bond and gold monetisation schemes are concerned, the Government’s promise of tax exemption appears to be fulfilled.
The Cabinet also cleared a scheme aimed at tapping part of an estimated 20,000 tonnes of idle gold worth about `5,40,000 crore into the banking system and issuing sovereign bonds as an alternative to the precious metal.
Through the gold monetisation scheme, gold in any form can be deposited with banks for a period of one to 15 years that will earn interest while redemption will be at the prevailing value at the end of the tenure.
Sovereign gold bonds, on the other hand, are aimed at people buying the precious metal as an investment. Such bonds will be issued in denominations of 5 grams, 10 grams, 50 grams and 100 grams for a term of five years to seven years with a rate of interest to be calculated on the value of the metal at the time of investment.
However, there will be a cap and a person can purchase only 500 grams in a year. Such bonds will be offered to only Indian citizens and institutions while the securities will be traded on exchanges to allow early exit for investors.
"It is safer and economically more stable to go under both these schemes," Finance Minister Arun Jaitley said while briefing reporters about that decision of the Cabinet, which is a follow-up of an announcement made by him in the Budget for 2015-16.