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Cabinet approves moratorium of four years for telcos to pay AGR dues

The decision is expected to offer interim cash flow relief to the sector where two of the three largest private telcos are saddled with dues.

September 15, 2021 / 08:32 PM IST
Representative image.

Representative image.

In a big relief to the debt-strapped telcos - Vodafone Idea and Bharti Airtel, the Cabinet on September 15 announced a moratorium of four years for the payment of the Adjusted Gross Revenue (AGR) dues. 

The announcement is a part of the big bang relief package for the telecom sector that includes nine structural reforms and five process reforms.

The four year moratorium also extends to other telecom dues such as the due payments of spectrum purchased in the past auctions except the recently concluded auctions earlier this year.

The deferment is protected by an interest component, which the telecom companies will have to pay right from the first day of the commencement of the moratorium period from October 1, at the rate of MCLR plus 2 percent.