AGR Dues Payment To Bring Down India Fiscal Deficit To 3.5% In FY20: SBI Economists
India’s fiscal math will change significantly post March 16, the deadline for telcos to pay their AGR dues, SBI economists say.
Payment of adjusted gross revenue dues of Rs 1.20 lakh crore by telecom firms will reduce India’s fiscal deficit to 3.5 percent of the gross domestic product in 2019-20, economists at State Bank of India said, but maintained that one will have to wait till March 16—the payment deadline—before the picture gets clear.
In Union Budget 2020-21, the government revised upwards its fiscal deficit target to 3.8 percent of the GDP in 2019-20 by invoking a so-called escape clause.
After facing the Supreme Court's ire over non-compliance with its AGR dues order, the telecom department is pushing for prompt payments by telecom firms.
"The fiscal arithmetic will change significantly post March 16, 2020, (the date till which telecom companies have to pay their AGR dues). 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 percent of GDP," the SBI economists said.
On Monday, Bharti Airtel Ltd. paid Rs 10,000 crore towards its AGR dues and said it is conducting a self-assessment exercise to pay the remainder before March 17, 2020. Vodafone idea Ltd. offered to pay Rs 2,500 crore of its total dues today and Rs 1,000 crore on Friday, but the Supreme Court rejected the proposal.