Prelims Focus: AGR, government equity stake

GS Paper II : Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

GS Paper III : Infrastructure

• The Union Cabinet approved the freezing of Vodafone Idea Ltd. (VIL)’s adjusted gross revenue (AGR) dues, amounting to ₹87,695 crore, for a period of five years (FY 2025-26 to FY 2030-31).
• AGR dues pertaining to FY 2017-18 and FY 2018-19.
• Based on Supreme Court orders, the government granted such relaxations.

Impact

• Ensures multiple players in the critical telecom sectors.
• The move will protect the interest of 20 crore VIL consumers.
• This step will protect the interest of Government of India stake of 49% in VIL.

Adjusted Gross Revenue (AGR)

• The AGR includes all revenue earned by the Internet Service Providers (ISPs), except for certain permitted deductions. Typically, these deductions include revenue from services like internet access charges paid to other service providers, roaming charges passed on to other networks, and taxes paid to the government.
• ISPs are required to file their AGR statements regularly with the Department of Telecommunications (DoT). This filing is usually done on a quarterly and annual basis.
• The filing must detail the gross revenue earned, the deductions claimed, and the resulting AGR. Based on this AGR, the ISP calculates the license fees and spectrum usage charges due to the government.
• ISPs must comply with the AGR filing requirements, and failure to do so can result in penalties, interest on unpaid fees, or even suspension of their licenses.
• AGR is a crucial component for the government to collect revenue from telecom operators, which is a significant source of income.