AGR dues not accounted for in Budget
But receipts from telcos pegged at ~1.33 trillion for the next fiscal yr
In the Union Budget, the government hasn’t included the adjusted gross revenue (AGR) dues, which the Supreme Court has ordered telecom service providers to pay, in its revenues for 2019-20 and 2020-21.
While upholding the AGR definition of the Department of Telecommunications (DOT), SC had in October 2019 asked telcos to pay up past dues estimated at Rs 1.47 trillion within three months. The industry plea, seeking a modification of the order to get more time for paying up the dues, is yet to be heard in the top court.
“The AGR dues have not been factored in by the government in its Union Budget as the matter is sub-judice,” said economic affairs secretary Atanu Chakraborty on the sidelines of the postBudget-ficci event on Monday. He said the AGR dues have not been accounted for either in the current financial year or the next. “We want to be on the conservative side while budgeting our revenues,” he added.
In the latest Budget, the government has estimated a revenue of ~1.33 trillion from telecom services in 2020-21. This is around ~74,000 crore more than the ~58,989 crore it expects to earn in the present financial year.
The government hasn’t specified the avenues from which ~1.33 trillion can be realised in the telecom sector.
It is either an ambitious target or the government would look for alternative resources, said analysts.
Besides AGR dues, spectrum auction across bands, scheduled for this year, would yield revenues. However, the financially stressed telecom companies are unlikely to bid aggressively in the auction.
Even after the SC deadline for paying up the AGR dues expired on January 23, the DOT did not take any coercive action against the defaulters as their appeals seeking relaxation in payment timelines is pending in the apex court.
The figure of ~1.33 trillion under the telecom head in the Budget raised apprehensions among telecom operators that they may have to pay a substantial portion of the AGR dues — over 50 per cent of ~1.47 trillion — in the next fiscal year.
According to Cellular Operators Association of India (COAI) estimates, telcos have to pay around ~16,000 to ~17,000 crore as licence fee and spectrum usage charge (SUC) this year.
Even after assuming that revenues will grow sharply due to increase in tariffs and redefinition of AGR, they say it cannot be more than ~30,000 crore for FY21. But with a moratorium of two years on payment of deferred spectrum for FY21, which is ~25,000 crore, this money will not be available. Also with negative response on 5G, COAI expects the government to get ~25,000 crore upfront for fresh spectrum auction next year.