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Cabinet approves relief measures for telecom sector, 4-year-moratorium to telcos for payment of dues

The Union cabinet has also allowed 100% foreign direct investment (FDI) in the telecom sector with safeguards.

Cabinet approves relief measures for telecom sector, 4-year-moratorium to telcos for payment of dues - dnm
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India, First Published Sep 15, 2021, 6:21 PM IST
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The Union Cabinet on Wednesday approved a relief package for the telecom sector that includes a four-year moratorium for the payment of the Adjusted Gross Revenue (AGR) dues, providing a relief to the debt-strapped telcos - Vodafone Idea and Bharti Airtel.

Briefing press persons on the decisions taken by the Cabinet, Telecom Minister Ashwini Vaishnav said nine structural reforms for the telecom sector were approved.

The Union cabinet has also allowed 100% foreign direct investment (FDI) in the telecom sector with safeguards.

The Union Cabinet has approved nine structural reforms and five process reforms for the telecom sector, aimed at giving relief to companies such as Vodafone Idea that have to pay thousands of crores in unprovisioned past statutory dues.

As part of the relief package, the telecos could opt to convert the interest due on their spectrum amounting to four-year moratorium, to government equity. The package comes as a relief to the struggling telecom sector that is going through a financial crunch.

In October 2019, the Supreme Court had asked telecom operators pay Rs 1,19,292 crore worth of AGR dues to the telecom ministry. Bharti Airtel’s dues are estimated to be Rs 43,980 crore, while Vodafone Idea’s were Rs 58,254 crore.

Telecom Minister Ashwini Vaishnaw said non-telecom revenue will be taken out of AGR. “PM took a bold decision over AGR (adjusted gross revenue) today. A decision has been taken to rationalise the definition of AGR,” he told the media after the Cabinet meet.

These measures are expected to ease the cash flow issues being faced by some players in the industry.

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