The Ministry of Communications has set up an inter-ministerial group (IMG) to look at the “stressed balance sheets” of various telecom companies and suggest solutions. Also Read - Ola to offer free oxygen concentrators to the needyAlso Read - Let our firms take part in 5G trials, China tells India
According to an office memorandum circulated, a Committee of Secretaries (CoS) from the Department of Telecom (DoT) in the ministry had discussed the issue relating to ‘Stress in the balance sheet in the select sector’ at its meeting on March 29.
Following the meeting, the Committee of Secretaries (CoS) approved the constitution of the group of officials from DoT and the Ministry of Finance. The telecom sector is reeling under debt of nearly Rs 800,000 crore, according to industry sources.
The annual interest payment of telecom companies is around Rs 78,000 crore. Sources attributed the cause behind the bleeding balance sheets of the telecom companies to the high-priced spectrum auctions which took place in 2014, 2015 and 2016. Last month, the Reserve Bank of India also expressed its concern over stressed assets in the telecom sector. ALSO READ: Department of Telecom in favor of more penal power for TRAI
The main tasks of the IMG will be to examine systemic issues affecting viability and repayment capacity in telecom sector and furnish recommendations for resolution of stressed assets at the earliest. It was also called upon to suggest policy reforms and strategic intervention for the telecom sector. The IMG is authorised to invite nominees from telecom sector and financial institutions and co-opt any other member.
The group has been asked to submit its recommendations within three months.