AGR Dues: Finance ministry against penalty relief for telecom cos | India Business News – Times of India


NEW DELHI: The finance ministry on Sunday objected to deferring or waiving a part of interest and penalty for the telecom industry hit by the Supreme Court’s adjusted gross revenue (AGR) burden, effectively blocking a reprieve for the beleaguered mobile operators.
At a specially-convened meeting in the telecom department headquarters, finance ministry officials said any concession on payment of penalty would “set a wrong precedent and lead to similar demands” from other sectors, sources told TOI. A full meeting of the multi-ministry digital communications commission is likely on Monday.
‘Telecom should not be monopoly or duopoly’
The government is working overtime to sort out the mess as telecom companies have time till March 17 to clear the dues. The order of the top court has asked the companies to pay Rs 1.47 lakh crore to the DoT, and this is in lieu of previous licence fee and spectrum usage charges dues, apart from the interest and penalty. A large chunk of the demand is in the form of interest and penalty. For example, of the total licence fee dues of Rs 92,641 crore, only Rs 22,589 crore is the principal. Besides this, telecom companies owe Rs 55,054 crore in spectrum usage charge (SUC) dues.

At Sunday’s meeting, there was unanimity that “all efforts need to be taken to save the existing companies” – which, if done, will provide a much-needed relief to Vodafone Idea that is on the brink.
“There should not be a monopoly, or even a duopoly, in the sector,” a top government source told TOI.
Vodafone Idea, which needs to pay Rs 53,000 crore in past dues, has paid only Rs 2,500 crore so far, while Airtel is required to clear Rs 35,000 crore (Rs 10,000 crore paid) and Tata group Rs 14,000 crore (paid Rs 2,197 crore). The discussions, led by telecom secretary Anshu Prakash, were attended by top officials from the finance and commerce and industry ministries as well as Niti Aayog. Sources said Prakash made a detailed presentation on the options on the table.
One of the proposals was to offer soft loans to companies to help them tide over an immediate cash crunch and clear the AGR-related dues. But government authorities were split on the modalities.
“However, it was mentioned that any such credit window should not be given through the telecom department, since it is also the receiver of the dues. Thus, it was proposed that public sector banks or other financial institutions or instruments can be used to provide emergency credit,” a source said.
The government is worried that closure of any company may create panic in the Indian telecom market and disrupt the ambitious Digital India programme. Also, the upcoming 5G auctions look set to be hit hard due to the existing financial crisis that the industry is facing. While Airtel chief Sunil Mittal has said that his “company is safe, and was never unsafe”, Vodafone Idea has made it clear that it will not be able to survive without a government bailout.
Vodafone Idea Chairman Kumar Mangalam Birla has already met finance minister Nirmala Sitharaman and telecom minister Ravi Shankar Prasad, where he has spoken about the need for a relief package.
Only Reliance Jio, the country’s biggest mobile operator, is safe from the financial mess as its past dues were only to the tune of Rs 200 crore that it has already cleared.
The Supreme Court’s AGR judgment was given on October 24, and had originally ordered the companies to pay the amount by Jan 23 (in three months). However, after the telecom department gave them a relaxation in this, the court expressed unhappiness over the issue, and asked the government to collect the money immediately.
If the government is not able to collect the full amount, it will have no option but to invoke the bank guarantees submitted by the companies. And if this is also insufficient to collect the dues, then in “extreme cases”, the telecom department may cancel the mobile licence of the companies.

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