Govt likely to meet telecom budget target

Recently, Bharti Airtel paid Rs 15,519 to the department of telecommunications (DoT) towards prepayment of the entire deferred liabilities pertaining to spectrum acquired in the auction held in 2014, while Reliance Jio paid around Rs 10,700 crore for spectrum acquired in 2016 auction.

In the absence of this one-time gain, the government would have failed to achieve its target.
In the absence of this one-time gain, the government would have failed to achieve its target.

Pre-payment of deferred spectrum liabilities by Bharti Airtel and Reliance Jio amounting to over Rs 26,200 crore will see the government meeting its budgetary revenue target from telecommunications during the current fiscal.

Recently, Bharti Airtel paid Rs 15,519 to the department of telecommunications (DoT) towards prepayment of the entire deferred liabilities pertaining to spectrum acquired in the auction held in 2014, while Reliance Jio paid around Rs 10,700 crore for spectrum acquired in 2016 auction.

The government had fixed a revenue receipt target of Rs 53,986.72 crore from telecommunications services for FY22. Once the annual licence fee and spectrum usage charges paid by the telecom operators, which would be in the range of Rs 25,000 crore to Rs 28,000, is added to the amount paid by Bharti and Jio, the budgetary target is likely to be achieved.

The government’s receipts from licence fee and SUC have been increasing due to rising adjusted gross revenue (AGR) of all telecom operators. Telcos pay 8% as licence fee on their adjusted gross revenue while SUC varies from 3% to 5% for different operators.

Over the past many years, the government has been failing to meet its revenue target from telecommunication services. For instance, for FY21, it had pegged an overambitious target of 1.33 lakh crore, which was later revised to33,737 crore. The FY21 revenue target may have been set in anticipation of full payment related to AGR dues of telecom operators, which they were required to pay as per the Supreme Court order in October 2019.

For FY20, the government managed to exceed the revenue target, because of part-payment of AGR dues amounting to about Rs 30,000 crore by three operators — Bharti Airtel, Vodafone Idea and Tata Teleservices.

In the absence of this one-time gain, the government would have failed to achieve its target.
Interestingly, in the last seven-eight years, the government has been able to achieve the budget estimate from telecom receipts only twice.

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