AGR dues: Telcos' payout to lower FY20 fiscal deficit to 3.5%, says SBI Ecowrap

Even if telecom operators pay a portion of their AGR dues, it will help the government realise a better fiscal deficit figure than it pegged in the recent Union Budget, according to SBI Research Desk. The latest SBI Ecowrap report says that the if the government can collect Rs 1.2 lakh from the telcos, its fiscal deficit for the current financial year will come down to 3.5 per cent.

Notably, telecom operators owe Rs 1.47 lakh crore to the Department of Telecommunications (DoT) in Adjusted Gross Revenue (AGR) dues, following a Supreme Court order in October last year. The payout includes Rs 92,600 crore as pending licence charges and Rs 55,504 crore as spectrum usage charges.

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On Friday last week, the Supreme Court chastised telecom operators for not paying their AGR dues despite an order from in this regard. The apex court has ordered telcos to clear their outstanding licence fees and spectrum usage charges before March 17, the next date for hearing in the AGR case.

"The fiscal arithmetic will change significantly post March 16, 2020... If we assume that the government is able to collect Rs 1.20 lakh crore through AGR dues, the fiscal deficit for FY20 will reduce to 3.5 per cent of GDP," said the SBI Ecowrap report published on Monday.

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"However, this will put a question on the amount that the Government can raise next year from the telecom sector out of Rs 1.33 lakh crore budgeted, which in turn can impair the fiscal arithmetic of FY21," it further added.

The government has estimated its fiscal deficit to remain at 3.8 per cent of the GDP in financial year 2019-20, and 3.5 per cent in 2020-21. "This estimation is consistent with Government's abiding commitment to macroeconomic stability," Finance Minister Nirmala Sitharaman had said in her Budget Speech on February 1.

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