The Union Cabinet, headed by Prime Minister Narendra Modi, on Wednesday approved a four-year moratorium on payment of spectrum dues by telecom companies (telecos) as a part of a relief package for the struggling sector, Telecom Minister Ashwini Vaishnaw announced today. He further added that the government had decided to allow 100 per cent foreign direct investment (FDI) in the sector. 

These decisions are aimed at providing relief to incumbent telecos, such as Vodafone Idea (Vi) and Bharti Airtel, which have to pay thousands of crores in unprovisioned past statutory dues. It comes weeks after billionaire Kumar Mangalam Birla had resigned as chairman of Vi on August 4. 

Speaking on the decisions taken for the telecom sector, Mr Vaishnaw also added that the government had decided to rationalise the definition of Adjusted Gross Revenue (AGR). He said that non-telecom revenue under the AGR would be removed. The minister added that these measures were expected to ease cash flow concerns being faced by some players in the industry. 

The Union Cabinet on Wednesday also approved the revised Production-Linked Incentive (PLI) scheme for the automobile sector, Union Minister Anurag Thakur said. The government reduced the outlay for this PLI scheme to Rs 25,929 crore from Rs 57,042 crore announced in November last year, with the focus shifting to producing electric and hydrogen fuel vehicles in conjunction with other incentive schemes.  

Briefing the media after the conclusion of the Cabinet meeting, Mr Thakur announced that the Cabinet had approved the PLI scheme for auto, auto components and drone industries. It would have a total provision of Rs 26,058 crore, of which Rs 25,929 crore would be for the auto sector and Rs 120 crore for the drone industry. 

Mr Thakur added that the incentives under the PLI scheme would be provided to the industry over five years, with the government estimating that the PLI scheme for the automobile and auto components industry would lead to a fresh investment of over Rs 42,500 crore, an incremental production of over Rs 2.3 lakh crore and additional employment opportunities of over 7.5 lakh jobs.