Govt freezes Rs 87K cr dues of Voda Idea, gives 5-year relief
About 48.9% stake in beleaguered telco held by govt
The government on Wednesday approved a major relief package for Vodafone Idea, freezing its outstanding AGR dues, approving a five-year moratorium on payment, and clearing the way for reassessment of the capped statutory charge - giving a critical lifeline to the beleaguered telco.
The relief measures approved by the Union Cabinet aim to protect the interest of the government (which has about 48.9 per cent stake in the telco), enable orderly payment of dues to the Centre by way of spectrum auction charges and AGR dues, ensure competition in the sector and safeguard the interests of 20 crore consumers of Vodafone Idea, according to sources.
The Cabinet, headed by PM Narendra Modi, agreed to freeze AGR dues of Vodafone Idea at Rs 87,695 crore, which the struggling company now has to start paying from 2031-32 fiscal and clear by 2040-41, sources aware of the decision said.
The frozen dues will be reassessed by the telecom department based on "deduction verification guidelines" of 2020 and audit reports, the sources said, adding that the outcome would be decided by a government-appointed committee and be binding on both parties.
AGR dues refer to payments owed by telecom companies to the government based on Adjusted Gross Revenue (AGR). It is the revenue on which telecom operators must pay license fees and spectrum usage charges.
As per the relief package, AGR dues for FY 2017-18 and FY 2018-19, which were finalised based on the Supreme Court order of September 2020, will now have to be paid over 2025-26 to 2030-31 fiscal without any change, they said.Sources said this amount works out to roughly Rs 120 crore per annum and between Rs 700-800 crore over the six years. Vodafone Idea has been battling a prolonged financial crisis, driven by intense price competition, high debt and massive AGR liabilities that arose from a change in the definition of AGR.
