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Adjusted Gross Revenue (AGR)

2020 JAN 9

Preliminary   > Economic Development   >   Indian Economy and Issues   >   Government initiatives

WHY IN NEWS?

Telcos seek open court hearing on AGR; Urge rethink on SC verdict upholding recovery of 1.47 lakh crore in past dues.

ABOUT AGR

  • Adjusted Gross Revenue (AGR) is the usage and licensing fee that telecom operators are charged by the Department of Telecommunications (DoT).
  • The AGR is divided into spectrum usage charges and licensing fees, pegged between 3-5 percent and 8 percent respectively.
  • As per DoT, the charges are calculated based on all revenues earned by a telco – including non-telecom related sources such as deposit interests and asset sales.
  • Telcos, on their part, insist that AGR should comprise only the revenues generated from telecom services.
  • The saga has been on since 2005 when the Cellular Operators Association of India (COAI) challenged the government’s definition for AGR calculation.
  • Later in 2015, the TDSAT (Telecom Disputes Settlement and Appellate Tribunal) stayed the case in favour of telecom companies and held that AGR includes all receipts except capital receipts and revenue from non-core sources such as rent, profit on the sale of fixed assets, dividend, interest and miscellaneous income.
  • The regulator has also included forex adjustment under AGR apart from ruling that licenses fee will not be charged twice on the same income.
  • It, however, exempted bad debt, foreign exchange fluctuations, and sale of scrap to be calculated for AGR.
  • However, setting aside TDSAT’s order, Supreme Court on October 24, 2019 upheld the definition of AGR as stipulated by the DoT.

Prelims Question

Q. Adjusted Gross Revenue (AGR), recently in news, is related to which of the following industries?
a. Mining
b. Telecom
c. Steel
d. Real estate

Answer to the Prelims Question