However, no relief was granted on the Rs 1.47 lakh crore Adjusted Gross Revenue (AGR) demand resulting from the Supreme Court's mandate on October 24.
In a massive relief to the stressed-out telecom companies, the government on Thursday announced a two-year extension for payment of Rs 42,000 crore as spectrum dues.
However, no relief was granted on the Rs 1.47 lakh crore Adjusted Gross Revenue (AGR) demand resulting from the Supreme Court's mandate on October 24. Only the apex court can give any relief on the matter as it is a legal case. The mobile operators are already in the process of challenging the verdict. They can expect any assistance, including an extension of the three-month payment timeline if SC feels the need for it.
At a meeting, the Cabinet Committee on Economic Affairs approved the plan to defer the spectrum payout till 2022. Finance minister Nirmala Sitharaman asserted that the relief was given in the wake of the financial stress currently faced by telecom firms.
Sitharaman also said that the payments will be equally spread over the rest of the term and the telcos will have to pay interest on it and back as well as back them with bank guarantees.
The decision comes few days after Sitharaman assured companies that the government does not want any company to shut operations due to financial unsustainability.
The relief for Airtel will be Rs 11,746 crore, Vodafone Idea will get a reprieve of Rs 23,920 crore and Reliance Jio Rs 6,670 crore.
It may also be noted that all the telecom operators have announced plans to increase tariffs in the coming weeks.
The industry welcomed the decision with Cellular Operators Association of India (COAI) Director General Rajan Mathews hoping that the government will take favourable view on other demands of the industry as well including a relief on the AGR matter as mandated by the Supreme Court and extended timelines for making the payments.
To set aside the due payment, both Vodafone and Airtel had posted massive losses. Vodafone had said that unless the government offered relief, or a legal remedy was found, it would be forced to shut down operations in India.
Vodafone Idea posted a loss of Rs 50,921 crore, the highest ever quarterly loss by any corporate in India.
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