According to ICRA, the government is now expected to collect Rs 280 billion from the telecom sector in FY22 instead of Rs 540 billion as was earlier estimated in the budget. This will also impact the country’s fiscal deficit.
That said, ICRA is of the view if the 5G auctions are held early next year as is expected, then the upfront payments to be made by telcos may come in by the end of March, 2022, which may offset the impact.
ICRA’s projections have in the backdrop of the government’s recent announcement of granting a four-year moratorium on adjusted gross revenue (AGR) and spectrum payments.
Based on the package announced by the government, ICRA estimates its deferment of non-tax revenues at Rs 460 billion per year for four years, beginning in FY23. It includes Rs. 140 billion from the moratorium on AGR dues and Rs. 320 billion from the moratorium on spectrum dues.
Since a moratorium was already in place for spectrum dues in FY22, the net impact is Rs. 140 billion this year.