Telcos partially pay government dues; 'slim hope' for Vodafone-Idea
Ailing telecom companies have paid their dues linked to adjusted gross revenue (AGR) in part to the government. The development comes after the Supreme Court pulled up the telcos and the government last week over non-payment of dues. The top court had refused to stop the government from taking coercive action against the telcos over any further delay. Here are more details.
Bharti Airtel on Monday deposited Rs. 10,000 crore to pay in part its total Rs. 35,586 crore dues. The firm still owes the government Rs. 25,586 crore. Vodafone-Idea paid Rs. 2,500 crore of its total Rs. 53,000 crore dues. The firm also promised to pay another Rs. 1,000 crore by Friday. Tata Teleservices paid Rs. 2,197 crore of total Rs. 13,800 crore dues.
Earlier on Friday, the Supreme Court set a deadline of March 17 for complete payment of dues by the telcos. Vodafone-Idea on Monday proposed before the court to pay Rs. 2,500 crore by the end of the day, and Rs. 1,000 crore by Friday, pleading no coercive action. The court, however, dismissed Vodafone-Idea's plea and allowed DoT to encash the telco's bank guarantee.
According to PTI, DoT officials will hold a meeting on Tuesday to discuss whether or not it should encash the bank guarantee. Sources told the news agency that "nothing is off the table," adding that a decision on the matter may be taken on Tuesday.
Vodafone-Idea's legal counsel, Mukul Rohatgi, told NDTV that the firm could shut by Tuesday if it had to pay its complete dues overnight. Rohatgi said, "The government should not rock the boat by encashing the bank guarantees, or the company should close tomorrow (Tuesday)." However, Head of Retail Research at MOSL, Siddhartha Khemka, told Reuters that there's "slim hope that (Vodafone-Idea) will get through."
With the telcos under pressure to pay the government, the Reserve Bank of India fears they may default on existing loans. RBI Governor Shaktikanta Das told PTI, "With regard to the impact on the banking sector, we're very closely monitoring it. It all depends on how the companies concerned are able to make the payments and when they are able to make the payments."
After the SC order, Union Finance Minister Nirmala Sitharaman said on Monday, "The Department of Telecommunications (DoT) is actively engaging with telecom companies after the Supreme Court order. I will hear from the department what position it wants to take on the matter."
Last week, the SC rapped the DoT for not taking coercive action against the telcos for not meeting the previous January 23 deadline for clearing dues. The court asked, "Is there no law in the country?" In October, the court had directed the telcos to pay Rs. 92,000 crore dues within three months. Last month, the court rejected the telco's appeal for a review.