Government Might Increase Time Frame For Paying AGR Dues: Here's Why

In order to provide long-term benefits to telecom operators, the government is reportedly planning to increase the time limit to clear AGR dues. Earlier, the Supreme Court fixed 10 years time limit for telcos to pay dues; however, the government might increase it to 20 years and likely take legal advice for the same.

In addition, the government is in the process of finalizing the relief package for the industry as it is under a deep financial crisis.

"The cabinet had earlier approved of a 20-year AGR payment tenure but the Supreme Court has given telcos 10 years," officials were reported by ET. "Now, typically the government does not overrule the decision of the Supreme Court but in this case, it has to keep the health of the sector, banks, employees, and the entire ecosystem in mind," they added.

Big Relief For Vodafone-Idea And Airtel

It is worth noting that both telecom operators requested more time to pay AGR dues, especially Vodafone-Idea. In fact, Vodafone-Idea Vodafone Idea MD Ravinder Takka recently said the same.

"I believe the government has the powers, although I think it is also helpful if the court agrees that these errors should be removed," Takkar had said. "Even in the Supreme Court filing, they installments) had presented a cabinet note on which the details of the number of installments and so on were put in...that was obviously approved by the cabinet."

Both promoters of the company tried their best to reduce the adjusted gross revenue dues but did not manage to do so as Supreme Court rejected the petition. The telecom operator has again filed a petition in the court for recalculation of dues.

In addition, the telecom operator is working hard to raise money for investing in networks and to clear some part of the dues. This is why we believe that any move which decreases the dues of Airtel and Vodafone-Idea will help them to offer better services. In fact, the increased time frame will allow them to make some investment in 4G and in the upcoming network. This seems like a good effort in terms of providing relief to telcos.