RBI gets `1.94L cr bids for maiden LTRO auction AGR dues mopup could cut FY20 fiscal deficit to 3.5%
Bharti, Tata make part payment, Voda Idea to pay
The RBI kicked off the maiden long-term reverse repo operation (LTRO) by conducting a three-year issue worth Rs 25,000 crore, for which it received bids of more than Rs 1.94 lakh crore. Deploying an out-of-the-box tool to ensure permanent and deeper liquidity in the system, which hovers over Rs 2.5 lakh crore now, the RBI had on Feb. 6 announced Rs 1 lakh crore of long-term reverse repo operations.
New Delhi, Feb. 17: Finding no leeway, telecom companies have started the process of paying up the mammoth Rs 1.47 lakh crore adjusted gross revenue (AGR) and spectrum dues to the government on Monday, with analysts predicting that the huge revenue collection will contain the country’s fiscal deficit to 3.5 per cent this fiscal against the Centre’s estimate of 3.8 per cent of the GDP.
However, with doubts still persisting about the debt-laden telcos’ ability to cough up the entire money by the Supreme Court-set deadline of March 16, the Reserve Bank of India said it is "very closely monitoring" the fallout of the crisis on banks.
Finance minister Nrmala Sitharaman said the telecom department has been actively engaging with telecom companies over the issue of statutory dues and she would wait to hear its decision. "I will wait to hear from the department or on behalf of the government from the department, so that we know what is the position that the department wants to take on the matter," she said.
Vodafone Idea, whose capacity and willingness to pay up was in doubt, however, said it would immediately pay Rs 2,500 crore to the Department of Telecommunications (DoT) and another Rs 1,000 crore before the end of the week. Vodafone owes about Rs 53,000 crore to the government in dues, interest and penalties.
Bharti Airtel said it paid Rs 10,000 crore to the telecom department towards statutory dues on Monday and will pay the balance after a self-assessment exercise. “The...amount of Rs 10,000 crore has been paid on behalf of Bharti Airtel, Bharti Hexacom, and Telenor," the Sunil Mittal-led company said.
As much as Rs 9,500 crore has been paid on behalf of Bharti Airtel (including Telenor India which merged with the company), and another Rs 500 crore for Bharti Hexacom, it said. As per the government's assessment, Airtel owes nearly Rs 35,586 crore in statutory dues.
Tata Group firm TTSL said it paid Rs 2,197 crore to the government to settle all its outstanding AGR dues. "Tata Teleservces Ltd and Tata Teleservices (Maharashtra) Ltd have made a payment of Rs 2,197 crore to the Department of Telecommunications towards license fee and spectrum usage charges," it said.
The government last week ordered mobile carriers to immediately pay the entire dues after the Supreme Court threatened the companies and officials with contempt proceedings for failing to implement its earlier ruling.
In a note SBI Research said the fiscal arithmetic will change significantly after March 16, the date by which telecom companies have to pay their AGR dues. Of the total Rs 1.47 lakh crore payable by the telcos to the DoT, Rs 92,600 crore is the unpaid licence fee and the rest Rs 55,504 crore is the charges for spectrum usage. “If we assume that the government is able to collect Rs 1.20 lakh crore through AGR dues, the fiscal deficit for FY20 will reduce to 3.5 per cent of GDP,” the note said. “However, this will put a question on the amount that the government can raise next year from the telecom sector out of Rs 1.33 lakh crore budgeted, which in turn can impair the fiscal arithmetic of FY21,” SBI Research pointed out.
In an interview, RBI governor Shaktikanta Das said the central bank is "very closely monitoring" the issue but so far no red flags have been raised.
"With regard to the impact on the banking sector, we are very closely monitoring it. It all depends on how the companies concerned are able to make the payments and when they are able to make the payments. We are monitoring it," he said.