The Centre’s bouquet of telecom reliefs are expected to put additional pressure on the country's fiscal health in this fiscal on account of lower non-tax revenue.

Icra chief economist Aditi Nayar said non-tax revenues will take a Rs 14,000-crore hit. She said the reliefs would defer the payment of non-tax revenues by Rs 46,000 crore for four years, comprising Rs 14,000 crore on AGM dues and Rs 32,000 crore on spectrum. Since the spectrum dues were under moratorium for this fiscal, the net impact for the year is limited to Rs. 14,000 crore.

The Centre has announced a four-year moratorium on adjusted gross revenue (AGR) and spectrum payments.

She said “the government had budgeted for inflows of nearly Rs 54,000 crore from other communication services for the current year, presumably boosted by the expectation of fresh auction inflows. We now assess the inflows from telecom into the government’s FY2022 non tax revenues to be limited to Rs 28,000 crore, trailing the budgeted Rs. 54,000 crore, which will modestly widen its fiscal deficit.”

The government is targeting a fiscal deficit of 6.8 per cent of GDP in FY22, a big improvement over the previous year when fiscal deficit shot up to 9.3 per cent .

With 5G auctions likely early next year, the upfront payment by the telcos may come in by the end of March, which may offset the impact of the deferment of the dues.

Brokerage Motilal Oswal has said the moratorium helped to solve the immediate liquidity woes of Vodafone Idea, but the comany’s ballooning debt and annual EMI after four years will be difficult to address. The government has, however, given the operators the option to convert the interest component during the moratorium period into equity.