Govt. May Ease Due Repayment For Telcos, Evaluate Requests

Following the Supreme Court’s dismissal of review petition filed by telcos, the government may take suggestions to ease the repayment of dues to the tune of $13 billion from the affected companies under consideration, a source told Bloomberg.

These ideas may range from repayment of the loans in tranches to the removal of the interest from the overall dues, according to a source quoted in the report. The source added that an independent panel to evaluate requests put forth by telecom companies could be set up on the condition that these companies would pay a portion of their dues right away.

However, following the January 16 judgement of the SC on the matter, Bharti Airtel said that the decision could further erode the financial viability of the already-struggling telecom industry. The telco added that interest, penalty and interest on the penalties form as much as 75 percent of the dues to be repaid.

Although the decision may negatively impact telecom players that are already reeling under financial stress, the same is likely to have an opposite effect on the government revenues which have taken a hit due to missed tax collection targets.

Meanwhile, the banking sector may also see its bad loan woes worsen since the government’s current repayment terms may push companies like Vodafone Idea into bankruptcy.―Money Control