Indian AGR payment plan rejected

Indian AGR payment plan rejected

According to Indian news reports the country’s government had recently approved a formula to recover adjusted gross revenue (AGR) dues from telecommunications companies over a 20-year period. So what went wrong?

According to the minister of state for communications, Sanjay Dhotre, the formula to recover AGR dues over 20 years was approved by the cabinet, after recommendations from the Digital Communications Commission (DCC) — the highest decision-making body in the Department of Telecommunications (DoT). The DCC had apparently discussed the issue in February.

With cabinet approval established, an application went before the Supreme Court asking that the dues be paid in annual instalments over 20 years or less at a reduced interest rate of eight percent.

The motivation, as we have indicated earlier, was to avoid the potential collapse of a company like Vodafone Idea and the knock-on effects on the economy, jobs and millions of consumers.

Considering that the DoT was one of the main drivers behind the October court hearing that ruled that AGR should include non-core items, this hasty backtracking seems to have been too little, too late. Certainly, the Supreme Court on Wednesday was unimpressed, notably by the DoT’s willingness to permit self-assessment of dues by operators.

Thus we are now back where we started in October: operators will have to pay their full, government-estimated dues, including interest and penalties – and the DoT has also been asked to withdraw the notice asking carriers to self-assess dues.

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