IMG to Discuss, Finalise Report on Telecom Sector’s Health on Friday
Report expected to provide relief to telcos saddled with debt of .₹ 5 L crore
New Delhi: The inter-ministerial group constituted to suggest measures for easing financial stress levels in the telecom industry will meet on Friday to “discuss, finalise and sign” its much-awaited report, said a top government official.
The report is expected to provide some succour to telcos col- lectively saddled with a whopping .₹ 5 lakh-crore of debt, with stretched balance sheets and eroding in profits amid a raging price war triggered by Reliance Jio Infocomm.
ET had previously reported that the inter-ministerial panel is considering options, including nearly doubling the deferred payment period for auction spectrum and cutting its interest burden.
Last week, telecom minister Manoj Sinha had told Lok Sabha the ministerial group would submit its report in 20 days, based on which the government would take remedial measures. The panel had met representatives of all telecom compani- es in batches in the run-up to submitting its recommendations to the Centre. The government had mandated the panel to examine systemic issues affecting the viability and repayment capacity of the industry and suggest corrective measures. The inter- ministerial group will also look into policy reforms and strategic interventions.
A one-time poster child of India’s economic progress, the debt-laden sector is battling a brutal price war and unsustainable levels of financial stress. Even the Reserve Bank of India (RBI) had recently alerted banks to keep a close watch on telecom sector loans amid profitability erosion at phone companies.
In fact, the sector regulator has recently urged the telecom department to coax the finance ministry to reduce the applicable goods & services tax (GST) from 18% to 5% by declaring the industry a core infrastructure sector.