Payment of AGR dues to bring down fiscal deficit

Mumbai: Payment of adjusted gross revenue dues of Rs 1.20 lakh crore by telcos will reduce the fiscal deficit for 2019-20 to 3.5 per cent of the GDP from the revised estimate of 3.8 per cent of the GDP, economists at SBI said on Monday.

However, one will have to wait till March 16 - the payment deadline - before the picture gets clear, they said. After facing the Supreme Court's ire over non-compliance with its AGR order, the telecom department is pressing for the payment of dues by the telcos.

"The fiscal arithmetic will change significantly post March 16, 2020, (the date till which telecom companies have to pay their AGR dues). If we assume that the government is able to collect Rs 1.20 lakh crore through AGR dues, the fiscal deficit for FY20 will reduce to 3.5 per cent of GDP," the economists at SBI said.

According to the revised budget estimates, the government expects a fiscal deficit of 3.8 per cent in 2019-20. Meanwhile, the economists also said that increase in LPG cylinder prices has forced people back to unclean cooking fuel alternatives, and the government's focus should now be on making cylinders affordable.

The report comes days after a steep hike in prices of LPG cylinder which were accompanied with a rise in subsidy burden taken by the government which provides 12 cylinders of 14.2 kg at subsidised rates.