The Union Cabinet on Wednesday approved a major relief package for debt-laden Vodafone Idea, freezing adjusted gross revenue (AGR) dues amounting to Rs 87,695 crore, a move aimed at easing the telecom operator’s long-term financial stress and safeguarding competition in the sector.
According to reports, the frozen AGR dues, calculated up to December 31, will not require immediate payment and will instead be repaid over a 10-year period beginning in the financial year 2031–32 and extending till FY41.
The Department of Telecommunications (DoT) will reassess the frozen amount at a later stage, based on Deduction Verification Guidelines and audit reports, the reports said. A government-appointed committee is expected to take the final decision on the revised dues.
However, the Cabinet relief does not extend to AGR liabilities for FY18 and FY19. These dues, which were finalised under a 2020 order of the Supreme Court, will remain unchanged and must be paid by Vodafone Idea between FY26 and FY31 as per the existing repayment schedule.
Also read: SC allows Centre to reconcile Vodafone Idea's AGR dues
Officials indicated that the review of the frozen dues could provide Vodafone Idea with greater flexibility in managing its long-term liabilities, even as the company continues to face severe financial constraints.
The Cabinet’s decision is also seen as a step to protect the government’s nearly 49 per cent stake in Vodafone Idea, ensure orderly recovery of statutory dues, preserve competition in the telecom sector, and safeguard services for the company’s roughly 20 crore subscribers nationwide.
Despite the relief, Vodafone Idea’s shares came under pressure following the announcement. At around 3.05 pm, the stock was trading at approximately Rs 10.8 on the National Stock Exchange, down 10.36 per cent.
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