In a major relief for debt-laden Vodafone Idea (VIL), the Union Cabinet on Wednesday approved a significant restructuring of the company’s Adjusted Gross Revenue (AGR) dues. The decision provides a five-year moratorium on a critical payment of approximately ₹18,000 crore, which was originally due by March 31, 2026.
Under the new schedule, the dues pertaining to FY 2017-18 and FY 2018-19 will now be payable over a six-year window between FY 2025-26 and FY 2030-31. Sources told TNIE that no additional charges or penalties will be levied during this extended period.
Furthermore, the Cabinet has decided to freeze VIL’s total AGR dues as of December 31, 2025, at ₹87,695 crore. This massive sum has been rescheduled for payment over a 10-year period, beginning in FY 2031-32 and concluding in FY 2040-41.
The government’s intervention follows the Supreme Court judgments dated October 27 and November 3, 2025. In those rulings, the Court stated there was no legal impediment to the Union Government reconsidering the dues, placing the matter squarely within the government's policy domain. The Court highlighted the "larger public interest," noting the government’s own 49% stake in the telco and the welfare of its 20 crore mobile consumers.
The relief package comes as VIL continues to challenge the Department of Telecommunications’ (DoT) demand for an additional ₹9,450 crore, while seeking waivers on interest and penalties for disputed components of the dues.
To ensure accuracy in the final payout, the frozen dues will undergo a reassessment by the DoT based on the 2020 Deduction Verification Guidelines and audit reports. A government-appointed committee will oversee this process, and its findings will be binding on both parties.
According to government sources, the decision is rooted in the strategic importance of the telecom sector to the "Digital India" mission. By ensuring VIL remains a viable third private player, the government aims to prevent a market duopoly, protect its significant equity investment, and ensure the orderly collection of future spectrum auction charges.