After the Supreme Court verdict upholding the government definition of Adjusted Gross Revenue (AGR), the government has set up a panel to consider giving relief to the debt-ridden telecom sector.
Crux of the Matter
The Committee of Secretaries (CoS) will consider an initial moratorium for payment of dues based on the net present value (NPV) method to ease the burden.
To ease cash flow, the CoS will specifically look into the demand for deferment of payment related to spectrum auction for the years 2020-21 and 2021-22.
The panel will also weigh the possibility of a longer payment schedule.
Tax on spectrum charges can also be eased after consultation with GST council.
Reliance Jio has alleged that offering any relief to Bharti Airtel and Vodafone Idea who have enough funds to pay their dues would be against SC orders and set a wrong precedent for other sectors
Curiopedia
Indian telecom industry underwent a high pace of market liberalisation and growth since the 1990s and now has become the world’s most competitive and one of the fastest growing telecom markets. According to London-based telecom trade body GSMA, the telecom sector accounted for 6.5% of India’s GDP in 2015 and supported direct employment for 2.2 million people in the country. GSMA estimated that the Indian telecom sector will contribute ₹14.5 lakh crore (US$210 billion) to the economy and support 3 million direct jobs and 2 million indirect jobs by 2020. More Info
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