NEW DELHI: In a reprieve for financially-crippled Vodafone Idea and the broader telecom industry, the Union Cabinet on Monday eradicated the necessity to submit hefty bank ensures in direction of previous spectrum purchases, with the relief anticipated in extra of Rs 30,000 crore for the assorted gamers.
While a considerable a part of the profit will circulate in for the cash-strapped Vodafone Idea – which is estimated to have bank guarantee wants of over of Rs 24,000 crore – others reminiscent of market chief Reliance Jio and Airtel can even acquire in good measure.
“The Cabinet has approved the relief as we believe that this does not alter the payment schedules demanded from the companies. The measure will help maintain the health of the industry and enable companies to better manage their financial cash flows and investment needs,” a senior official conscious of the event instructed TOI.
“There are also certain conditions that companies will need to meet. We had incorporated the conditions to ensure that the exchequer is protected from any potential payment defaults, if they ever happen,” the supply added.
The telecom industry, led by industry physique Cellular Operators Association of India (COAI), had additionally been demanding the waiver of bank ensures after the government via a reform package deal introduced in 2021 eradicated the necessity for them beginning 2022.
The present relief covers bank ensures required in direction of spectrum funds bought in auctions held in 2012, 2014, 2015, 2016, and 2021.
