Figure 2: No Copyright Infringement Intended

Context:

• the Union Cabinet approved a set of nine structural and procedural reforms to address the short-term liquidity needs as well as long-term issues of telecom companies.

Impact on Telcos:

• A four-year moratoriumon payment of dues arising due to the Supreme Court’s September 1, 2020 judgment on adjusted gross revenue (AGR) will provide short-term relief to debt-laden Vodafone Idea and Bharti Airtel. 
• Measures such as streamlining of the auction calendar and removal of the spectrum usage charges (SUC) from auctions, too, are likely to bring down the dues outgo, while helping telcos plan their auction purchase.

Impact of Reforms on Govt Finances:

• It will face some revenue loss in the next four financial years even if two of the three private players opt for it.
• For the current financial year, the government had estimated receipts of Rs 53,987 crore from spectrum usage charges, licence fee levies and other levies. The bulk of this, however, will have to be forgone for four financial years once the telecos opt for the moratorium.

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