The Cabinet on September 15 proclaimed a moratorium of four years for the nullification of the Aggregated Gross Revenue (AGR) dues, reported Moneycontrol. This arrives as a huge aid for the telecom giants Vodafone Idea and Bharti Airtel, who are trapped under debt.
This announcement will certainly provide a cash flow relief on an interim basis to battle with the heavy impending dues. In October 2019, the Supreme Court had held it compulsory for the telecom operators to pay AGR dues worth Rs 1,19,292 crore to the Department of Telecommunications. Meanwhile, the pegged dues of Bharti Airtel is Rs 43,980 crore, whereas Vodafone Idea’s pegged dues were Rs 58,254 crore.
Vodafone Idea, powered by India’s Aditya Birla Group and UK’s Vodafone Group has paid Rs. 7854 crores in the form of AGR dues. The company is yet to pay Rs. 9000 crore as its upcoming AGR instalment by March 2022. Bharti Airtel has paid AGR dues worth Rs. 18000 crore, much less than the Rs 4500 for its approaching instalment. The previous month, Sunil Mittal, Chairman, Bharti Airtel had initiated a hike in tariffs and a reduction in government imposition to back the telecom industry.
Vodafone Idea and Bharti Airtel have been trying ceaselessly to lessen the AGR dues by adopting the legal route but couldn’t find a bright side. It had initiated a review petition for re-ascertaining the AGR liabilities claiming arithmetical discrepancy by the telecom ministry while estimating the dues.
Commenting on the most debated term AGR, the Department of Telecommunications said that the telcos must pay all the revenue earned by them, including from non-telecom sources such as the sale of assets and deposit interests.