Cabinet approves next round of spectrum auctions; India-USA MoU among its key decisions

On Wednesday, Union Cabinet chaired by Prime Minister Narendra Modi deliberated and zeroed down on some key decisions. se decisions included approval of next round of spectrum auction, revised cost estimate of rastern region power system improvement project and also transfer of sugar export subsidy directly to farmers' accounts. Cabinet has also approved a Memorandum of Understanding (MoU) between India and USA for exchange of information in electricity sector. 

Cabinet's key decisions on Wednesday:

1. Approval of MoU between India and USA 

Cabinet gave its approval for Central Electricity Regulatory Commission’s proposal for entering into a Memorandum of Understanding between Central Electricity Regulatory Commission (CERC), India and Federal Energy Regulatory Commission (FERC), United States of America (USA) for exchange of information and experiences in areas of mutual interest to both in electricity sectors. activities under MoU include: 

• Identify energy-related issues and develop topics and possible ndas for exchange of information and regulatory practices in areas of mutual interest
• Organize visits by Commissioners and/or staff to participate in activities at each or’s facilities
• Participate in seminars, visit, and exchanges
• Develop programs of mutual interests and where appropriate hold se programs locally to enhance participation
• When practical and of mutual interest, provide speakers on energy issues and or personnel (manment or technical

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2. Auction of spectrum

Cabinet approved a proposal of Department of Telecommunications to conduct spectrum auction through which spectrum will be assigned to successful bidders for providing commercial mobile services. auction will be for spectrum in 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz and 2500 MHz frequency bands. Spectrum will be offered for assignment for a validity period of 20 years. A total of 2251.25 MHz is being offered with a total valuation of Rs. 3,92,332.70 crore (at reserve price). By winning right to use spectrum through auction, incumbent telecom service providers will be able to augment ir network capacity whereas new players will be able to start ir services.

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Detailing on process of auction, Cabinet has informed that successful bidders may pay entire bid amount in one go (upfront) or may exercise an option to pay a certain amount (25% for spectrum won in 700 MHz, 800 MHz, 900 MHz bands or 50% for spectrum won in 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz bands) upfront and remaining amount in a maximum up to 16 equated annual instalments, after a moratorium of two years. Additionally, successful bidders will also have to pay 3% of Adjusted Gross Revenue (AGR) excluding wireline services as spectrum us charges for spectrum won through this auction.

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3. Assistance of about Rs. 3,500 crore for sugarcane farmers

Cabinet has also approved assistance of about Rs. 3,500 crore for sugarcane farmers. Farmers sell ir sugarcane to sugar mills, however, farmers are t getting ir dues from sugar mill owners as y have surplus sugar stock. To address this concern, Government is facilitating evacuation of surplus sugar stock. This will enable payment of dues of sugarcane farmers. Government is expected to incur about Rs. 3,500 crore for this purpose and this assistance would be directly credited into farmers’ accounts on behalf of sugar mills against cane price dues and subsequent balance, if any, would be credited to mill’s account.

Farmers sell ir sugarcane to sugar mills, however, y are t getting ir dues from sugar mill owners as y have surplus sugar stock. This decision is expected to benefit five crore sugarcane farmers and ir dependents, as well as five lakh workers employed in sugar mills and related ancillary activities.  

4.  Revised cost estimate of rth Eastern Region Power System Improvement Project

Cabinet Committee on Ecomic Affairs approved Revised Cost Estimate (RCE) of rth Eastern Region Power System Improvement Project (NERPSIP) at an estimated cost of Rs. 6,700 crore.  scheme is being implemented through POWERGRID, a Public Sector Undertaking (PSU) under Ministry of Power in association with six beneficiaries - rth Eastern States - Assam, Manipur, Meghalaya, Mizoram, Nagaland, and Tripura and is targeted to be commissioned by December 2021. After commissioning, project will be owned and maintained by respective rth-Eastern State Utilities.

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