Budget 2020: Haven’t Factored In AGR Dues By Telecom Operators, Says Economic Affairs Secretary

The government hasn’t considered adjusted gross revenue dues from telecom companies in its receipts for this financial year and the next as the matter is in court, Economic Affairs Secretary Atanu Chakraborty said.

The Union Budget 2020 projects Rs 1,33,027 crore as receipt from communication services—more than double that expected in the ongoing fiscal.

Following a 14-year tussle over the definition of adjusted gross revenue, the Supreme Court had last year ruled that Indian telecom operators will have to include non-core revenue to calculate levies, dealing a crippling blow to a bruised industry that stares at dues and penalties worth at least Rs 90,000 crore to the Telecom Ministry. The definition is used to calculate spectrum charges and licence fees.

Last month, the apex court rejected a review petition filed by telecom operators challenging these dues. The cut-off date for paying dues was Jan. 23, but the companies, including state-run firms, have approached court seeking relief to discuss a timeline for payment.

The operators also had to contend with rising debt and declining profits after Mukesh Ambani-backed Reliance Jio Infocomm Ltd. offered free data followed by dirt-cheap tariffs. That spurred a wave of exits and consolidation in the sector.

The increase in revenue projected in the budget is expected on account of spectrum charges and license fees from telecom companies, Chakraborty told reporters. As the matter is sub judice, the government decided not to factor in AGR dues in the current and the next financial year while making budget calculations, he said.