Setting in movement the reforms introduced for the telecom sector, the Department of Telecommunications (DoT) has amended licence norms to make clear and rationalise the rates of interest for delayed funds of licence payment and performed away solely with the penalty on late cost of the dues.
As per the brand new norms, the DoT will now cost 2 per cent curiosity above the one-year marginal value of lending charge (MCLR) of State Bank of India (SBI) for delay in cost of licence charges or another statutory dues as a substitute of the 4 per cent that was being levied.
Additionally, the curiosity can even be now compounded yearly and never month-to-month, as was the norm.
“Any delay in payment of licence fee or any other dues payable under the licence beyond the stipulated period will attract interest at a rate which will be 2 per cent above the one- year MCLR of SBI existing as on the beginning of the financial year (namely 1st April) in respect of the licence fees or any other dues pertaining to the said financial year,” the DoT stated. These amendments have come into impact from October 1.
Industry physique Cellular Operators Association of India (COAI) welcomed the rationalisation of rates of interest, saying it could promote ease of doing enterprise. “We appreciate the step of rationalisation of interest rates on delayed payment of license fee (LF) and any other dues under the licence, removal of penalty and interest on penalty. We welcome this step towards easing the financial stress and promoting ease of doing business in the telecom sector,” COAI director basic SP Kochhar stated.
Last month, the Union Cabinet authorized reform proposals for the telecom sector, entailing 9 structural and procedural measures which might be aimed toward assuaging sectoral stress by addressing near-term liquidity considerations.
Among the steps authorized for the telecom sector, the one that’s doubtless to offer quick reduction to debt-laden firms reminiscent of Vodafone Idea was the choice to offer a four-year moratorium on cost of all dues arising because of the Supreme Court’s September 1, 2020, judgment on adjusted gross income (AGR). A moratorium of 4 years on cost of spectrum bought in previous auctions, barring the public sale of 2021, has additionally been provided to the telcos. All these measures are potential in nature.
The telecom sector can even be capable of obtain 100 per cent overseas direct funding (FDI) via the automated route, up from the 49 per cent permitted proper now.
