The government is now expected to mop up Rs 28,000 crore from the telecom sector in FY22, sharply lower than the Rs 54,000 crore it had estimated in the budget, which will impact the country’s fiscal deficit, ratings agency said. However, with the 5G auctions likely to be held early next year, the upfront payment to be made by telcos may come in by the end of March, 2022, which may offset the impact, say analysts.
“We now assess the inflows from the telecom sector into the GoI’s FY2022 non tax revenues to be limited to Rs 28,000 crore, trailing the budgeted Rs 54,000 core, which will modestly widen its fiscal deficit,” Aditi Nayar, chief economist at ICRA, said in a statement.
The ratings agency’s estimates come after the government on Wednesday announced a four-year moratorium on adjusted gross revenue (AGR) and spectrum payments.
Based on the package announced by the government, “we have assessed its deferment of non-tax revenues at Rs. 46,000 crore per year for four years starting from FY2023. This comprises Rs. 14,000 crore related to the moratorium on AGR dues and Rs. 32,000 crore from the moratorium on spectrum dues,” Nayar said.
However, FY2022 was already under moratorium for spectrum dues, so the net impact for this year is limited to Rs. 14,000 crore.
“However, the GoI had budgeted for inflows of nearly Rs. 54,000 crore from other communication services for the current year, presumably boosted by the expectation of fresh auction inflows,” which will not be met, ICRA added.
The government’s near Rs 54,000 crore revenue expectation from the telecom sector in FY22 though did not factor in any proceeds from 5G spectrum auctions.
The sale is now likely to be held in January-February, 2022, as per new telecom minister Ashwini Vaishnaw. This means, some of the upfront payment from winning bidders are likely to accrue to the government by the end of this fiscal year itself. Top Five News