NEW DELHI: The Union Cabinet on Wednesday approved a 4 year moratorium for the cash-strapped telecom sector and rationalised the definition of AGR.
The announcement comes as a big relief to companies like Vodafone Idea which had to pay thousands of crores to the Centre in unprovisioned past statutory dues.
Briefing the media after the Union Cabinet meeting, telecom minister Ashwani Vaishnaw said that 100 per cent foreign direct investment (FDI) will be allowed in the sector.
In all, the Cabinet announced 9 structural reforms and 5 process reforms.
“These reforms will change the framework of the entire telecom sector. They will deepen and broaden the industry,” the minister said.
The relief package for telcos will help the three major wireless carriers including Mukesh Ambani’s Reliance Jio but especially the embattled Vodafone Idea.
The move comes six weeks after billionaire Kumar Mangalam Birla resigned as chairman of beleaguered Vodafone Idea Ltd (VIL) on August 4.
Vodafone Idea has already paid the government Rs 7,854 crore ($1.07 billion) in telecoms dues, but still owes roughly Rs 50,000 crore.
The move comes six weeks after billionaire Kumar Mangalam Birla resigned as chairman of beleaguered Vodafone Idea Ltd (VIL) on August 4.
In September last year, the Supreme Court had granted 10 years to the telecom companies to clear their AGR dues of aorund Rs 1.43 lakh crore to the Centre.
The court had made it clear that the companies have to pay the dues without further review, with March 31, 2021 being the deadline for operators to pay the first instalment.
Thereafter, it had directed the telecom firms to pay annual instalments at the end of every financial year till 2031, falling which the companies would be subject to penalty.
Vodafone, which has a net debt of Rs 1.91 lakh crore, has previously raised serious concerns about its ability to stay afloat without government help. The company’s non-executive chairman K M Birla stepped down last month.
Meanwhile, Sunil Mittal-led Bharti Airtel has paid dues worth Rs 18000 crore and still owes Rs 25,976 crore to the government.
The announcement comes as a big relief to companies like Vodafone Idea which had to pay thousands of crores to the Centre in unprovisioned past statutory dues.
Briefing the media after the Union Cabinet meeting, telecom minister Ashwani Vaishnaw said that 100 per cent foreign direct investment (FDI) will be allowed in the sector.
In all, the Cabinet announced 9 structural reforms and 5 process reforms.
“These reforms will change the framework of the entire telecom sector. They will deepen and broaden the industry,” the minister said.
The relief package for telcos will help the three major wireless carriers including Mukesh Ambani’s Reliance Jio but especially the embattled Vodafone Idea.
The move comes six weeks after billionaire Kumar Mangalam Birla resigned as chairman of beleaguered Vodafone Idea Ltd (VIL) on August 4.
Vodafone Idea has already paid the government Rs 7,854 crore ($1.07 billion) in telecoms dues, but still owes roughly Rs 50,000 crore.
The move comes six weeks after billionaire Kumar Mangalam Birla resigned as chairman of beleaguered Vodafone Idea Ltd (VIL) on August 4.
In September last year, the Supreme Court had granted 10 years to the telecom companies to clear their AGR dues of aorund Rs 1.43 lakh crore to the Centre.
The court had made it clear that the companies have to pay the dues without further review, with March 31, 2021 being the deadline for operators to pay the first instalment.
Thereafter, it had directed the telecom firms to pay annual instalments at the end of every financial year till 2031, falling which the companies would be subject to penalty.
Vodafone, which has a net debt of Rs 1.91 lakh crore, has previously raised serious concerns about its ability to stay afloat without government help. The company’s non-executive chairman K M Birla stepped down last month.
Meanwhile, Sunil Mittal-led Bharti Airtel has paid dues worth Rs 18000 crore and still owes Rs 25,976 crore to the government.
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