The financially stressed telecom sector, which has also been flagged by the central bank, owes Rs 97,681 crore to its lenders, according to Union Finance Minister Arun Jaitley.
In a written reply to the Rajya Sabha, Jaitley said that State Bank of India Chairman Arundhati Bhattacharya has pointed out that stress in the telecom sector has reached "highly unsustainable levels" due to erosion of revenue and earnings of the service providers.
Quoting the Reserve Bank of India figure, Jaitley said total outstanding (funded) advances by public sector banks to the 'communications' sector stood at Rs 63,415 crore, while total exposure to the sector worked out to be Rs 97,681 crore. The communications sector includes, telecom - fixed network; telecom towers; telecommunications and telecom services.
Jaitley further added that Bhattacharya has made certain recommendations for tackling stress in the sector. The suggestions, include aligning deferred payment liabilities for spectrum for its life, rationalisation of regulatory charges, quick resolution of litigation on definition of adjusted gross revenues, easing regulation of merger and acquisition.
For public sector banks, the gross non performing asset ratio and stressed advances ratio for the sector stood at 3.68 percent and 11.29 percent respectively, at the end of 2016-17 fiscal.
Government has already constituted an inter-ministerial group for the sectorFinance Minister Arun Jaitley
At present, a portion of spectrum auction amount is taken as upfront payment by Department of Telecommunication, and the rest after a two-year moratorium is paid out every year in 10 installments. The Indian telecom industry is locked in an intense tariff war following entry of Reliance Jio, which with its free calling and cheaper data plans, forced operators to slash prices.
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