Four-year moratorium now approved by the cabinet, a relief for the telecom industries


Union Cabinet lets the telecom sector take a moment of relief. It approves a relief package for the telecom sector and several other structural reforms to give the industry the push to stand on its feet.

The Cabinet on Wednesday approved a 4-year moratorium for AGI dues and PLI for the automated sector. 

Vodafone Idea, a significant beneficiary of this approval, has been provided with some relief on the prolonged impending due amounting to Rs.50,399.63 crore.

Vodafone Idea, along with several players in the telecom sector, has brought forward their financial situation, which currently is in losses.

Bharti Airtel has paid up a significant amount of its dues, yet payment of Rs. 25,976 crores are still pending. 

The Moratorium will be set in motion from October 1, 2021. The relief package encompasses moratorium payments to pull the ailing telecom sector, including Bharti Airtel, Reliance Jio and Vodafone Idea.

The telecom mister stated the redefinition of the AGR in place as non-telecom revenue is taken out of it.

He further added- approval of 100% FDI in Telecom Sector via automatic route. The announcement encompasses nine structural and five process reforms.

5% additional incentives are awarded for electric and hydrogen fuel cell vehicles; even Battery and Hydrogen Fuel cell makers are to be provided with an extra incentive.

Under the PLI scheme, component makers are asked to make investments worth Rs.500 crore over five years, while the 2-wheeler and 3-wheeler have to make 1000 crore.  

Last year, the Supreme Court nudged the telecom sector as it passed a ruling asking the telecom players Bharti Airtel and Vodafone to pay off their prolonged dues to the government.

This led the banks to inform the government of their inability to pay, asking for more time for the same, particularly Vodafone Idea. 

The structural reforms are farsighted, aiming to expand India’s current global auto sector share of 2% and effectively deal with the cash crunch of the ailing telecom sector.

The approval also directs attention towards the auto component import worth 17 billion, and reducing the same seems to be one of the many priorities.

The Ministry assures the minimal impact of the approvals on the government revenue. 

Guruksha Gurnani
Guruksha Gurnani
An economics graduate amidst pandemic still whining about the farewell that didn’t take place. Unfinished letters, manuscripts, and poems adorn my library. Writing isn’t just a skill, it’s a safe haven after an exhausting day at work. This is home.



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