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Centre approves 100% FDI in telecom, allows 4-year moratorium to pay statutory dues


In a major relief to the ailing telecom sector in India, the Modi government has taken a major decision for reforms and approved 100 per cent foreign direct investment (FDI) in the sector. The decision was taken during a cabinet meeting chaired by Prime Minister Narendra Modi.

This investment can come through the automatic route. Now foreign companies will be able to invest their entire shares in any company in India or can also buy an Indian company completely.

Giving information about the decisions taken by the cabinet, Telecom Minister Ashwini Vaishnav said that a 4-year moratorium has also been approved on the AGR dues of telecom operators. But for this, they have to pay interest. Along with this, the government has taken many big decisions keeping in mind the interests of customers and increasing employment opportunities in the telecom sector.

The spectrum user charges will be rationalized and there will be now an annual compounding of rates rather than a monthly one. Spectrum can now be surrendered and also shared by the telcos.

The government had also decided to have a calendar of spectrum auctions to give more certainty about this important requirement of telcos. Usually, the auction may be done in the last quarter of a financial year.

The responsibilities of the telecom sector had increased significantly during the coronavirus period as data consumption, use of social media and virtual meetings had increased during this time. Despite the challenge, the sector has outperformed, although some companies were buried under the economic burden, which expected a relief package from the government. The reforms being made now will further strengthen broadband and telecom connectivity in the coming era.

Vaishnav told that 9 major reforms have been done in the telecom sector. In this, the definition of AGR dues will be changed, as well as the monthly interest rate of companies has now been made annual. Apart from this, relief has also been given on fine. The duration of the spectrum has also now increased from 20 years to 30 years.

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