New Delhi: The Union Cabinet on Wednesday approved a relief package for the telecom sector that includes a four-year moratorium on payment of statutory dues by telecom companies as well as allowing 100% foreign direct investment (FDI) through the automatic route.
Briefing reporters on the decisions taken by the Cabinet, telecom minister Ashwini Vaishnav said nine structural reforms for the telecom sector were approved.
The definition of adjusted gross revenue (AGR), which had been a major reason for the stress in the sector, has been rationalised by excluding non-telecom revenue of telecom companies.
AGR refers to revenues that are considered for payment of statutory dues.
The minister said that 100% FDI in telecom via the automatic route was approved by the Cabinet.
Among the measures approved were a four-year moratorium on unpaid dues, AGR and spectrum dues, he said.
These measures are expected to help India’s three major wireless carriers including tycoon billionaire Mukesh Ambani’s Reliance Jio but especially the embattled Vodafone Idea.
According to Hindustan Times, Vaishnaw said all those who will avail of the moratorium will have to pay some interest, and that the moratorium will start from October 1.
Additionally, the Cabinet approved an incentive scheme for the automobile sector, aimed at boosting production of electric and hydrogen fuel-powered vehicles, and to promote the manufacture of drones.
The government will give about Rs 26,000 crore in incentives to auto companies and drone manufacturers over a five-year period, Anurag Thakur, minister of information and broadcasting, told reporters.
“The incentive scheme has been designed to help India become a global player in the automobile sector,” Thakur said, adding that it will also boost the country’s efforts to increase local manufacturing.
The production-linked incentive scheme is expected to help attract new investment of about Rs 42,500 crore in the auto sector and Rs 5,000 crore in the drones sector over the five year period, the government said in a statement.
Auto parts makers will get incentives to produce components for clean cars as well as for investing in safety-related parts and other advanced technologies like sensors and radars used in connected cars, automatic transmission, cruise control and other electronics.
The scheme’s focus was redrawn as Tesla Inc gears up to enter India.
(With inputs from PTI and Reuters)