Modi government waives ₹6L crore spectrum dues for defense, railways
What's the story
The Indian government's Union Cabinet has approved a major one-time waiver of over ₹6 lakh crore in spectrum dues for certain government departments, including Defense, Railways, and Space. The waiver is aimed at eliminating penalties and most interest charges on the spectrum dues owed by these departments, according to The Economic Times. However, it will not be applicable to public sector units (PSUs) or private telecom operators.
Waiver details
Departments to pay principal amount, nominal interest
Under the new decision, the departments will only have to pay the principal amount along with a nominal interest of around 5%. The rest of the dues will be waived off. The spectrum dues owed by government departments, including both interest and penalty components, have reportedly exceeded ₹6 lakh crore. Most of these dues are for spectrum administratively assigned to government agencies for critical purposes like defense communications and satellite operations.
Defaulter departments
Top defaulters include Ministry of Defense
The top defaulters of spectrum dues include the Ministry of Defense, Information and Broadcasting, Space (DoS), and Railways. Some dues have been pending since 2004. Over time, late fees and compounded interest have increased these amounts several times over. The decision comes after years of debate over whether it is fair to levy commercial charges on government departments for spectrum used in the public interest.
Charge details
System that led to huge pending amounts
The ministries and departments are required to pay certain charges for using the airwaves. If they default, a late fee of 24% is charged on the amount, with interest compounded annually. Even if the entities pay the principal but delay it, a late fee is charged and compounded annually. Prasar Bharti, under the Information and Broadcasting Ministry and the defense departments, has huge pending amounts due to this system.
Usage breakdown
Why these ministries have huge pending amounts
Prasar Bharti uses a large chunk of spectrum for its broadcasting operations, while defense is a major user of spectrum. The DoS uses it for satellite operations, and the Railways has been allocated spectrum, including in the premium 700MHz band, for signaling and security purposes. Thousands of MHz of airwaves in different bands have been allocated to these entities.