NEW DELHI : The Union Cabinet headed by Prime Minister Narendra Modi on Wednesday approved a four-year moratorium on payment of the spectrum dues by telecom companies as part of a relief package for the struggling sector, Telecom Minister Ashwini Vaishnaw announced. He further added that the government has decided to allow 100 per cent foreign direct investment (FDI) in the sector.
The move is aimed at providing relief to incumbent telcos such as Vodafone Idea and Bharti Airtel which have to pay thousands of crores in unprovisioned past statutory dues. It comes weeks after billionaire Kumar Mangalam Birla resigned as chairman of Vodafone Idea (Vi) on August 4.
Speaking on the decisions taken for the telecom sector, Vaishnaw said that the government decided to rationalise the definition of Adjusted Gross Revenue (AGR). He said that non-telecom revenue under AGR will be removed.
Cabinet has approved nine structural reforms in the sector.
The Telecom Minister also announced that the Cabinet has allowed 100 per cent FDI in the telecom sector with safeguards through the automatic route.
He said that these measures are expected to ease the cash flow concerns being faced by some players in the industry.
Cabinet approves PLI scheme for auto, drone sector worth Rs 26,058 crore
Additionally, the Cabinet also approved the revised production-linked incentive (PLI) scheme for the automobile sector, Union Minister Anurag Thakur said. The government reduced the outlay for this PLI scheme to Rs 25,929 crore from Rs 57,042 crore announced in November last year.