rediff.com: Budget 2000 Impact


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March 1, 2000

Overall impact: Positive

Positive features

Customs duty reduction from 15 per cent to 5 per cent in optic fibre should result in optic fibre cables becoming cheaper. Telecom infrastructure (the backbone of the infotech revolution) could really get a kickstart, since this move coincides with the Railways' recent decision to allow corporates to lay optic fibre cables along its rail network.
Customs duty on silica preforms, a raw material used for manufacture of optic fibre has also been reduced from 15 per cent to 5 per cent. Similarly, duties on fibre reinforced plastic rods or cables have been reduced from 25 per cent to 15 per cent.
Customs duty on cellular phones has been reduced from 25 per cent to 5 per cent, thereby reducing the price differential between official and grey markets in one swift move. The customs duty on battery packs for cellular phones has also been reduced from 40 per cent to 15 per cent. The market for cellular phones is expected to grow significantly as a result of this move.
Concessional customs duty rate of 5 per cent for specified equipment for private telecom companies (cellular and basic), pager services, radio trunking systems and satellite communication has been extended till March 31, 2001. A similar concession has been extended to Internet Service Providers (ISPs) for specified equipment.
Reduction in computer prices could translate into good business for ISPs and, in turn, for telecom equipment manufacturers.

Negative features
None

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BUDGET IMPACT

The first cut

SECTOR IMPACT:

Automobiles