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AGR an unprecedented crisis, sought cut in taxes for industry: Mittal

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Sunil Mittal-wefornews

New Delhi, Feb 20 : Bharti Airtel chairman Sunil Mittal on Thursday met Telecom Minister Ravi Shankar Prasad in the wake of the current AGR payment to be made by the telcos, saying he suggested that for the overall health of the industry, taxes needed to be brought down.

Mittal, however, said the issue of AGR payment per se did not figure in the talks. The discussion was on the overall industry, he said.

“Adjusted Gross Revenue has been an unprecedented crisis for the telecom industry. I made certain suggestions on the overall health of the industry. Industry has been heavily taxed and taxes need to be looked at. The issue of very low revenues left in the kitty of the industry needs to be addressed and the AGR also need to be dealt with”, he said after the meeting with Prasad.

He said Airtel will make the balance payment expeditiously .”The demand for reduction in taxation for the telecom sector has been for a long time. The regulator has been supporting it”, he said in response to a query if he has sought any cut in levies.

Mittal met the minister amid reports that said government was looking at some form of relief for the sector in view of huge AGR dues to be paid by telcos.

The telcos, particularly Vodafone Idea, which is severely hit by the AGR payment, has sought a bailout. The options here before the government are limited. There could be a cut in licence fee and spectrum usage charges, staggered payment of AGR over long years with interests, a waiver of interest and penalties on AGR dues.

So far the Government has neither stated nor indicated any relief for the telcos. On Wednesday, Mittal met Finance Minister Nirmala Sitharaman and sought sustainability for telcos in the stressful times. He had said Indian telecom industry has been under stress for the last three-and-a-half years and the government should ensure sustainability of the sector.

“The only thing government needs to do is to focus on how to ensure sustainability of the sector,” he said after meeting the FM.

Airtel faces Rs 35,500 crore AGR dues. The company has already announced its plans to pay the dues that arose from the Supreme Court ruling.

Earlier this week, Bharti Airtel had paid Rs 10,000 crore to the telecom department as part of its AGR dues. The company plans to pay the balance amount before the next date of Supreme Court’s hearing which is on March 17.

Former Finance Secretary Subhash Chandra Garg has said in a blog that telecom crisis is not limited to AGR and that the problems are much deeper.

Vodafone Idea Chairman Kumar Managalam Birla, had also met the Finance Minister on Wednesday. The troubled telecom major has also paid Rs 2,500 crore to the Department of Telecom (DoT) earlier this week and paid another Rs 1,000 crore on Thursday.

Vodafone Idea has an AGR bill of Rs 53,000 crore. The company has sought relief from government to remain a going concern.

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Economic recovery to take at least 2-3 quarters: PE funds

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New Delhi, April 6: The situation during the ongoing COVID-19 will be grim and the recovery thereafter will also take time as private equity experts fear that more people will die from hunger than pandemic in India most people under estimating the gravity and period of impact, which at the very least will take two to three quarters.

At a private equity webinar, Shailendra Singh, Managing Director at Sequoia Capital flagged that fear that more people will die from hunger than pandemic in India.

He added that most people are under estimating gravity and the period of impact, which will be the at the very least two to three quarters.

Singh said they are asking every portfolio co to re validate the 5 critical assumptions their business hinges on. “You will be surprised that how many of them have actually changed/ could change in long run (Zivame),” he added. They have also advised companies to look at adjacent markets or alternative business models.

Singh said that economic Recovery will not start before Q3/Q4 of this financial year. Most countries will move manufacturing towards domestic markets especially in healthcare & R&D and reliance on China will go down.

Anuj Ranjan of Brookfield said that cycles are inevitable, it will come back but will take time. After 9/11, no-one thought they would ever get on a plane again. But they did and it was much stronger than before, but in 22 months. Air travel started but the security changed forever.

Ranjan added that the government right now is like an ICU doctor – keeping the economy (patient) in induced coma, till cure is found (vaccine — 2 years)

In terms of private equity it will be a will be a flight back to US and North America. Since valuations will come off significantly, PE will be less inclined to take emerging market/currency risks, when returns are good there.

Hospitality will come back, but will take time. Real estate investors will find good deals in six months and the wedding season will drive this.

Ranjan said retail will be badly hit and Brookfield expects significant bankruptcies in SME retail/mom & pop/restaurants as 6 weeks of no revenue will bankrupt them.

Consumption will come back, but in six months or more. This event has given a big push to the existing trend to e-commerce. Some malls in US died, but many are flourishing – the ones that have turned to experience centres, he added.

Kunal Shroff of Chryscapital said that risk has increased through the roof. The new deals are on hold or slow. All exits are delayed, private equity funds are focussing on portfolios just now to preserve liquidity, draw cash lines, no capex and extend the cash burn.


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52% CEOs expect job losses post lockdown: CII Survey

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Picture Credit : Gadgets Now

New Delhi, April 5 : Around 52 per cent of top corporate bosses in India anticipate that job losses will occur after the nation-wide lockdown is lifted, according to a CII CEO Snap Poll.

The survey found that 46 per cent of the CEOs do not expect job cuts while the rest 2 per cent are not sure.

“About 52 per cent of the CEOs anticipate job losses in their respective sectors post lockdown. 47 per cent of the firms expect upto 15 per cent job losses and another 32 per cent expected 15 to 30 per cent job losses,” said the CII survey.

The survey, conducted electronically, saw a cross-country participation of close to 200 CEOs across sectors.

Further, the survey found that much of the inventory of companies is lying idle.

“About 64 per cent (inventory) is expected to be cleared in less than 30 days. However, demand will not hold good for the next 30 days and beyond,” it said.

Also, most of the firms expect revenues to fall more than 10 per cent and profits to decline more than 5 per cent in the fourth quarter of FY2019-20 and the first quarter of FY2020-21.

The CII Poll also shows that access to manpower and movement of products are the major constraints in essentials manufacture, transport and distribution.

Commenting on the survey, CII Director General Chandrajit Banerjee said: “The government could announce a fiscal stimulus package for the industry and implement it on fast track mode, given that the sudden imposition of the lockdown has significantly impacted industry operations and the uncertainty of a recovery threatens substantial loss of livelihoods going forward.”

Industry players and chambers have raised concerns of the economic impact of the current crisis and also sought a stimulus package from the government.

Finance Minister Nirmala Sitharaman has assured that the government is working on a package for the industry and would announce its soon. She is also heading the Covid-19 economic response task force.

On March 26, Sitharaman announced an economic relief package of Rs 1.7 lakh crore for the poor and migrant workers under the Prime Minister Gareeb Kalyan Scheme.

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Air India operates international charter, cargo flights

Besides, the flag carrier on Saturday commenced the first cargo flight between Shanghai and Delhi.

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Air India Flight

New Delhi, April 4 : National passenger carrier Air India on Saturday mobilised massive resources to operate international charter and cargo flights.

Accordingly, the airline repatriated stranded foreigners from India and also brought back critical medical cargo from Shanghai.

“All these flights are being operated adhering to all safety protocols laid down by the DGCA,” the airline said in a statement.

The airline is scheduled to operate 18 charter flights to fly back German, French, Irish and Canadian nationals stranded in India amid the nationwide lockdown, as requested by their respected embassies.

“While the Germans and French will be flown to Frankfurt and Paris, the other two nationalities will be taken to Heathrow in London from where Canada and Ireland (governments) would be making further travel arrangements for them,” the statement said.

“These chartered flights started from March 31 with German nationals flying to Frankfurt. Earlier, AI had ferried Israeli nationals to Tel Aviv as well in a chartered flight,” it added.

On Saturday, flights to London and Paris were being operated.

Besides, the flag carrier on Saturday commenced the first cargo flight between Shanghai and Delhi.

“A charter cargo flight was also operated between Delhi and Shanghai today to fly in vital medical cargo from China to India,” the statement said.

“Air India is also scheduled to operate some more cargo flights between Delhi and Shanghai till April 9. These flights will bring critical medical equipment to India,” it added.

The airline will also be operating cargo flights to Hong Kong.

On the domestic front, the Air India Group has been transporting essential cargo throughout the country. The airline has operated 79 cargo flights between March 26 and April 3.

The flights, being operated regularly between the metro hubs — Delhi, Mumbai, Bengaluru, Kolkata, Hyderabad and Chennai — to the remote destinations of northeast and other far-flung areas of the country, are carrying medical equipment and other essential items.

Furthermore, the airline has been instrumental in rescuing stranded Indians, mainly students and pilgrims, from China, Japan and Europe.

Lauding Air India’s continued efforts in repatriating stranded foreigners, Amber Dubey, Joint Secretary at the Ministry of Civil Aviation, said in a recent LinkedIn post: “Heard from a senior Air India pilot who commanded the special flight from Mumbai to Frankfurt today that every ATC they crossed said ‘Really proud of u guys’.”

“This was a special Air India flight that flew out stranded European and Canadian citizens from Mumbai. All crew members including the pilots wore the mandatory Covid-19 coveralls for over 20 hours at a stretch (to/fro and ground time at Frankfurt). They will now remain in self-quarantine for 14 days,” he added.

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