Vodafone Idea owes around Rs 2 lakh crore to the department of telecommunications (DoT), which includes AGR dues, penalties and interest in relation to revenue that the companies were supposed to share with the government for spectrum allotment. Similarly, the DoT had demanded Rs 9,450 crore additional AGR from Vodafone, which it challenged in the Supreme Court
The Supreme Court has extended a great relief to struggling telecom operator Vodafone Idea (VI) Ltd by granting freedom to the government to address the grievances of the beleaguered company over adjusted gross revenue (AGR) dues.
Vodafone Idea owes around Rs 2 lakh crore to the department of telecommunications (DoT), which includes AGR dues, penalties and interest in relation to revenue that the companies were supposed to share with the government for spectrum allotment. Similarly, the DoT had demanded Rs 9,450 crore additional AGR from Vodafone, which it challenged in the Supreme Court.
In the Supreme Court, the central point of Vodafone Idea’s argument for relief was based on the fact that the government owns a 49 per cent stake in the telecom company. Solicitor General of India Tushar Mehta, too, concurred with Vodafone Idea’s pleading — giving undue advantage to Vodafone Idea compared other telecom companies.
The government’s stand in the Supreme Court appears to project discrimination between state-owned companies and privately-held companies. This treatment goes against the cardinal policy of equality — because it discriminates between individual investors of two private companies. It could also damage India’s image in terms of policy stability.
The government has sovereign power to frame policy and implement it. However, both the policymaking and implementation should go hand-in-hand. The government cannot overlook companies taking advantage of ambiguous wording in the agreement for several years and later come back to demand that they shell out every paisa with interest and penalties with a retrospective effect.
Another argument extended by the Solicitor General was about the interest of 20 crore users and 18,000 employees. But strangely, nothing was done when several companies got shut down after the 2019 AGR verdict. If India wants to attract foreign investment, it must provide a policy that does not discriminate between companies based on their ownership.
