New Delhi: It is a matter of relief for the financially handicapped people. vodafone idea more comprehensive telecommunications industryThe Union Cabinet on Monday abolished the requirement of submitting hefty bank guarantees for past spectrum purchases, with relief expected to amount to over Rs 30,000 crore for various players.
While a major chunk of the profit will flow to cash-strapped Vodafone Idea – which is estimated to need bank guarantees of over Rs 24,000 crore – others like market leaders Reliance Jio and Airtel will also get a good amount. would benefit.
“The Cabinet has approved the relief as we believe it will not alter the payment schedule demanded from companies. The measure will help maintain the health of the industry and help companies manage their financials,” a senior said. “This will help in better managing cash flow and investment needs.” An official aware of the developments told TOI.
“There are also certain conditions that the companies will have to fulfill. We had included the conditions to ensure that the exchequer is protected from any possible payment default, if it ever happens,” the source said.
The telecom industry, led by industry body Cellular Operators Association of India (COAI), had also been demanding relaxation of bank guarantee after the government abolished the requirement of bank guarantee starting from 2022 through a reform package announced in 2021. .
The existing relief includes bank guarantees required for payment for spectrum purchased in auctions held in 2012, 2014, 2015, 2016 and 2021.