At first glance, that sounds like a big win. Some of this money does come from real payments, such as licence fees and spectrum auctions, paid by private telecom companies. But a large chunk comes from state-owned BSNL, which is dependent on the government for its survival.
Only this “income” isn’t real cash changing hands, but merely a bookkeeping exercise.
Mint examines the government’s telecom receipts, the role of BSNL, and how much of these earnings are driven by cash flows rather than accounting entries.
What are telecom receipts?
In every budget, the government projects certain receipts from different ministries. Similarly, the communications ministry earns revenue from the private telecom operators from licence fees and spectrum-related payments, shown as receipts from other communication services in the budget. Telecom operators pay 8% of their adjusted gross revenue (AGR) as statutory dues to the government. Of the same, 3% goes towards the licence fee, and the remaining 5% goes to the Digital Bharat Nidhi (DBN), which the government uses to bridge the digital divide.
These telecom receipts form an important part of the government’s revenue from the communications sector and help fund regulatory functions and initiatives such as expanding digital infrastructure across the country.
What are the estimated telecom receipts for FY26 and FY27?
On 1 February every year, when the government presents the Union Budget, it shares estimates for the upcoming fiscal year for receipts and expenditures. The same also includes revised estimates (RE) for the ongoing fiscal year, as well as actual receipts and expenditures for the previous fiscal.
In the Union Budget 2026-27, for telecom receipts, the government has increased its estimates by 71% for 2025-26 from the earlier projections of ₹82,443 crore. In comparison, data from the previous budgets suggests a 2.5-33% increase in the receipt projections. To be sure, of the government’s total non-tax revenue estimate of ₹6.67 trillion for 2025-26, ₹1.4 trillion, or 21.1%, is expected to come from telecom receipts.
For 2024-25, actual receipts from the telecom sector stood at ₹84,794 crore, whereas for 2026-27, they are projected to be ₹1.17 trillion.
What role does BSNL play in boosting these receipts?
BSNL depends on the government for capital expenditure, spectrum, and to pay its statutory dues. This means that, unlike private telecom operators, the state-owned entity does not purchase spectrum in auctions.
What happens is that the government first pays BSNL the amount, which is shown as an expenditure in its books. Later, BSNL pays the government back that amount, usually by issuing equity shares in the name of the President of India. According to telecom analysts, despite being non-cash in nature, the government shows them as receipts, which, in a way, inflates its receipts on paper; in actuality, cash receipts are lower.
In simple terms, the government is giving BSNL money, and in return, the company gives back shares on paper—so it counts as income in the books, even though no money is actually earned.
Government officials argue that this accounting treatment reflects the economic value of the spectrum and other support extended to BSNL. Spectrum is a scarce national resource with an assessed market value, and the accounting entry ensures it is not shown as being given away for free. By issuing equity shares to the government, BSNL effectively compensates the state on paper, even if no cash changes hands.
The approval for the same comes via the relief packages the government has announced in the past for BSNL. For example, the Union cabinet in June 2023 approved the proposals of the department of telecommunications for the reservation and allotment of spectrum worth ₹89,047.8 crore to BSNL for the rollout of 4G/SG services through equity infusion in 2023-24 to 2025-26. Since 2019, the government has given three revival packages to BSNL and MTNL worth a combined ₹3.2 trillion.
How does BSNL issue equity shares to the government?
Even though BSNL is fully state-owned, it can “issue” shares to the government by increasing its authorized share capital. This is basically a way for the government to inject money into BSNL. For example, in June 2023, the Union Cabinet approved raising BSNL’s authorized capital from ₹1.5 trillion to ₹2.1 trillion, allowing the government to invest more funds in the company. Authorized capital is the maximum amount of share capital a company is allowed to issue to shareholders, as approved in its corporate documents.
How much of the reported telecom receipts then represents actual cash inflows?
According to estimates from telecom analyst Parag Kar, about ₹63,000 crore is estimated to be shown as receipts from BSNL in lieu of spectrum, AGR payments, and capital expenditure support for 2025-26. This has led to an increase in telecom receipts in 2025-26. The government had accounted for the expenditure for the same in previous years, but did not book it under receipts.
This means that around 55% of the government’s receipts are expected to be actual cash receipts from private operators.
