Cabinet Approves Four-Year Moratorium For Telecos Burdened Under AGR, Spectrum Dues

Electronics & Information Technology Minister Ashwini Vaishnaw announced the decision taken of the relief package which will heal the cash-strapped ailing telecom industry. 

Representative Image | Telecom to get boost after Cabinet decision

New Delhi: In a bid to improve the telecom industry framework, the Union Cabinet on Wednesday approved a moratorium of four years for the Adjusted Gross Revenue (AGR) and spectrum dues.

Electronics & Information Technology Minister Ashwini Vaishnaw announced the decision of the relief package which is aimed to heal the cash-strapped telecom industry. 

"In order to maintain the cash flow, those companies availing the moratorium facilities will have to pay an interest rate on the moratorium amount," the MInister added.

 The moratorium will start from October 1 as per the Cabinet decision. 

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“The reforms are deep and broad. They are structural. These reforms will bring in change today, tomorrow, and in the future,” the minister said.

Union Communications Minister Ashwini Vaishnaw mentioned that now the spectrum will be auctioned for 30 years instead of 20 years.

"The spectrum can also be surrendered after 10 years of lock-in period after paying a defined surrender amount," he added.

Vaishnaw, who was briefing the media here along with Union Information and Broadcasting Minister Anurag Thakur with regard to the decisions taken by the Union Cabinet, said the spectrum auction will be held in the last quarter of the financial year.

The Union Cabinet also gave its nod to 100 percent FDI in telecom via automatic routes.

Union Communications Minister Ashwini Vaishnaw said Prime Minister Narendra Modi took a bold decision over AGR today.

“A decision has been taken to rationalise the definition of AGR. All non-telecom revenue will be taken out of AGR,” he added.

Vaishnaw further said there was a regime of heavy interest, penalty, and interest on penalty on payment of license fees, spectrum user charges, and all kinds of charges.

“It has been rationalised today. Annual compounding (of interest) will be done instead of monthly compounding,” he added.