Big relief for Vodafone Idea as Cabinet freezes AGR dues worth 87,695 crore, shifts payment deadline to FY41

In a big relief to Vodafone Idea, the Union Cabinet on Tuesday approved the rescheduling of Adjusted Gross Revenue (AGR) dues amounting to Rs 87,695 crore payable by the telecom major, according to media reports.

Cabinet reportedly cited that the decision has been taken in public interest as it felt that there is a need to avoid excessive concentration in the telecom sector. Competition in the sector will eventually benefit more than 20 crore consumers, the government believes.

In its decision, the Cabinet has decided to freeze Vodafone Idea’s AGR dues of Rs 87,695 crore as of December 31, 2025. Now the telecom company will be allowed to pay this amount in installments from FY 2031-32 to FY 2040-41. The decision has been considered as a big relief to the struggling telecom major. 

However, the decision shows the Cabinet's intention is to support the telecom sector and keep it financially stable, since it is an important part of national infrastructure.

The decision came after the supreme court said the central government can rethink on the unpaid dues by the telecom company. 

SC observation on the matter

During the hearing of the Vodafone Idea case in October/November 2025, the Supreme Court clarified that the central government can rethink and reassess Vodafone Idea’s AGR dues if it wants to. The court said this is a policy decision for the government and not something the court should block. 

Earlier, Vodafone Idea asked the court to reduce or waive part of its AGR liabilities, especially interest and penalties. The Supreme Court called these petitions “misconceived” and dismissed them, saying the requests were not legally justified and refused to weaken its earlier 2019 AGR ruling.

Essential for healthy competition

According to the reports, the Cabinet noticed that only a few companies now dominate the telecom sector. They felt it is important to have more than one private operator to keep competition alive, give customers choices, and avoid problems like expensive tariffs or poor service. So, keeping Vodafone Idea running as a stable company was considered important for the overall health of the industry.