Govt to only offer cash flow relief to telcos

The relief package worked out by the government for the telecom sector does not address the structural issues but only focuses on providing an interim cash flow relief to the financially stressed operators. Here too, clarity is needed whether the cash flow relief proposed with regard to the payment of AGR dues can be provided to the operators without approaching the Supreme Court. Sources said legal advice has not been sought till now.

On the adjusted gross revenue (AGR) dues, of which the biggest chunk of over `58,000 crore is to be paid by Vodafone Idea, the Department of Telecommunications (DoT) has proposed that the payment be deferred for a period of four years. However, the net present value (NPV) of amount due as per the SC order will be fully protected and recovered in the subsequent five years. This means no relief on interest, penalty, etc; only the instalments due in the next four years will be deferred, but added equally over instalments due in the subsequent five years.