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Reliance Industries Chairman Mukesh Ambani on Wednesday welcomes the union government's major reforms for the stress-laden telecom sector.

“Telecom sector is one of the prime movers of the economy and the key enabler for making India a Digital Society, I welcome the Government of India’s announcement of reforms and relief measures that will enable the industry to achieve the goals of Digital India. I thank the Prime Minister for this bold initiative," Ambani said in a statement. 

RIL's telecom arm Jio stated, “Government’s telecom sector reforms will encourage us to bring newer and greater benefits to our customers," adding that Jio's mission is “to bring the fruits of the Digital Revolution to 1.35 billion Indians."

Furthermore, telco major Bharti Airtel also said that these reforms pave way for sustainable three private, one state-owned telecom operator structure. 

Shares of telecoms Bharti Airtel Ltd and Vodafone Idea Ltd close up 4.5% and 2.9%, respectively. 

“The pathbreaking reforms announced by the government today will go a long way in unshackling the telecom sector. These reforms demonstrate the governments firm commitment to ensuring healthy growth of the industry. The measures also reflect the decisiveness of the Prime Minister, the Telecom Minister, and the government to address long-standing issues," said Kumar Mangalam Birla, chairman, Aditya Birla Group. 

The sector was also hit by a Supreme Court ruling last year which forces carriers Bharti Airtel and Vodafone Idea to give in to a government demand for billions of dollars in dues which they have long contested.

Vodafone Idea has paid the government 78.54 billion Indian rupees ($1.07 billion) in telecoms dues, regulatory filings show, but still owes roughly 500 billion.

Banks led by State Bank of India have called on the government to give Vodafone Idea more time to clear its tax dues and airwaves' fees, Reuters reported this week.

Vodafone, which has a net debt of 1.91 trillion rupees, has previously raised serious concerns about its ability to stay afloat without government help. Its billionaire non-executive chairman stepped down last month.

Bharti Airtel has said it paid dues estimated at 180 billion rupees and government figures show it owes a further 259.76 billion.

Separately, the cabinet also approved a production-linked incentive scheme for the automobile sector, the source said, without giving details

In big bang reforms, the Union Cabinet on Wednesday approved a relief package for the telecom sector that includes a four-year moratorium on payment of statutory dues by telecom companies as well as allowing 100 per cent foreign investment through the automatic route.

Briefing reporters on the decisions taken by the Cabinet, Telecom Minister Ashwini Vaishnav said nine structural reforms for the telecom sector were approved.

The definition of AGR, which had been a major reason for the stress in the sector, has been rationalised by excluding non-telecom revenue of telecom companies.

AGR refers to revenues that are considered for payment of statutory dues.

The minister said that 100 per cent FDI (Foreign Direct Investment) in telecom via the automatic route was approved by the Cabinet.

Among the measures approved were a four-year moratorium on unpaid dues, AGR and spectrum dues, he said.

These measures are expected to ease the cash flow issues being faced by some players in the industry.

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