The Government's Bottomless Pit

THE INDIAN government has entangled itself in a financial quagmire called Vodafone Idea (Vi), pouring taxpayer money into a failing telecom giant with no foreseeable escape. While the burden of an unrecoverable investment weighs on the state, the incumbent promoter group, led by the Aditya Birla Group, enjoys an unbroken streak of operational control and strategic benefits - without accountability.

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As of December 2024, Vi's total debt stood at an astronomical Rs 2.3 lakh crore - a sum that would be impossible for the firm to repay. This includes Rs 77,000 crore in adjusted gross revenue (AGR) dues and Rs 1.4 lakh crore in spectrum liabilities, all payable directly to the government. The brutal reality is that Vi is never likely to clear its debt, yet the government continues to sustain this sinking ship with public funds.

The reason? A mix of economic fearmongering and corporate favouritism. If Vi collapses, it would undoubtedly trigger a market panic, tarnish the government's reputation, and send a chilling signal to investors. Moreover, a Vi downfall would lead to widespread job losses, strain the banking system, and leave 200 million subscribers in chaos. To prevent this, the government scrambles to keep Vi alive at any cost - even if it means abandoning financial prudence and distorting market fairness.

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