‘IMG Re­port on Tel­cos’ Fin Health Likely in 20 Days’

The Economic Times - - Companies: Pursuit Of Profit - Our Bu­reau

Kolkata: The in­ter-min­is­te­rial panel look­ing into the fi­nan­cial health of stressed tele­com op­er­a­tors will sub­mit its re­port in 20 days, based on which, the gov­ern­ment will take cor­rec­tive steps, tele­com min­is­ter Manoj Sinha said on Wed­nes­day.

“The tele­com in­dus­try is un­der fi­nan­cial stress and action will be taken based on the re­port of the in­ter-min­is­te­rial group (IMG),” Sinha told Lok Sabha dur­ing ques­tion hour. Back in June, the gov­ern­ment’s in­ter-min­is­te­rial panel on fi­nan­cial health of the tele­com in­dus­try had met all tele­com com­pa­nies in batches in the run-up to sub­mit­ting its rec­om­men­da­tions to the Cen­tre.

The min­is­ter said the panel has been man­dated to ex­am­ine sys­temic is­sues af­fect­ing the vi­a­bil­ity and re­pay­ment ca­pac­ity of the tele­com in­dus­try, and sug­gest reme­dies. The panel, he said, would also look into pol­icy re­forms and strate­gic in­ter­ven­tions for the sec­tor.

A one-time poster child of In­dia’s eco­nomic progress, the tele­com in­dus­try with some .₹ 5 lakhcrore of debt has been in dire straits, bat­tling a bru­tal price war and grap­pling with un­sus­tain­able lev­els of fi­nan­cial stress. Even the Re­serve Bank of In­dia had warned that banks must keep a close watch on such sec­toral loans amid ero­sion of telco prof­itabil­ity.

In this con­text, Sinha told Lok Sabha that the sec­tor reg­u­la­tor had also sug­gested that the tele­com depart­ment coax the fi­nance min­istry to re­duce the ap­pli­ca­ble goods & ser­vices tax (GST) for tele­com ser­vices from 18% to 5% by declar­ing the in­dus­try a core in­fras­truc­ture sec­tor.

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