Economics of Television for India

assuming a depreciation rate of 20 per cent the total cost would be written- off with ID (at the rate of 20 per cent) in seven years as against 12 years under normal depreciation. Thus tax collections which were postponed on account of ID are realised during the eighth to the twelfth years in this case. The interest-free loan in the initial years would be equal to 20 \cr cent of ihe cost of assets qualifying for ID but eventually when the postponed lax revenues are collected iduring the eighth to the twelfth years in the above illustration) the not loan would Jiei reduced. In due course, the a:no n.t of loan would tend to stabilise at a level equivalent to 20 per cent of the investment in plant and machinery and the rale of growth of such investment. The cost to the exchequer, in the form of interest on revenue collections postponed, would also eventually stabilise.