The Government Owns 49% of Vodafone Idea Limited. Now It’s Bailing Out Its Own Investment.
Vodafone Idea owes ₹83,000 crores in dues to the government.
Now the government is giving Vodafone Idea a 4-5 year interest-free holiday on those same dues.
Think about that logic for a second.
How We Got to This Absurd Situation!?
In 2019, the Supreme Court ordered telecom companies to pay Adjusted Gross Revenue (AGR) dues, basically fees they should have paid over the years but didn’t.
Vodafone Idea’s bill: ₹83,000 crores.
They couldn’t pay. So in 2021, the government gave them a moratorium i.e. a payment pause. But it wasn’t interest-free. The dues kept growing with compound interest.
In 2023, the government converted ₹6,133 crores of Vi’s dues into equity. Got a 33% stake.
In March 2025, converted another ₹36,950 crores into equity. Stake jumped to 49%.
The government is now VI’s largest shareholder. Bought at a 47% premium because of “legal and pricing regulations.”
Translation: paid more than market price for a failing company’s shares.
Now December 2025: Vi admits it “significantly underestimated” pilot requirements. Can’t operate beyond FY 2025-26 without fresh funding. Owes ₹18,000 crores in March 2026.
Government’s solution? 4-5 year interest-free pause for the payment. After that, reduced dues paid in 6 installments. Total liability might be cut in half after “reassessment.”
The government is lending money to itself. At zero interest. To save its own investment? Funny, right?
The Math That Doesn’t Add Up
They’re losing money every quarter while owing ₹2.3 lakh crores. And the government keeps giving them relief.
Why? Because letting Vi die creates a duopoly.
IndiGo controls 64% of aviation. We saw what happens there, the government suspends safety rules to keep them flying.
Jio and Airtel combined would control 83%+ of telecom if Vi collapses. That’s not a market. That’s two companies deciding prices.
Telecom Minister Jyotiraditya Scindia said it clearly: “India must have competition in every sector. It’s not good enough having a duopoly.” Because clearly, the common man is at the suffering end of these duopolies.
So the government is trapped. Save Vi and throw good money after bad. Or let it fail and create a duopoly where Jio and Airtel control everything.
Why This Keeps Getting Worse
Vi raised ₹3,300 crores in December through its infrastructure subsidiary. Investors bought secured debt.
Sounds positive until you realize they needed that money to “repay obligations to Vodafone Idea” so Vi could “pursue capex and growth plans.”
They’re borrowing money to pay themselves so they can invest in networks. While owing ₹2.3 lakh crores.
The government is simultaneously Vi’s biggest creditor (₹2 lakh crores owed), biggest shareholder (49% equity), and only hope for survival (bailout packages).
That’s less of a market relationship & more of a hostage situation where the hostage-taker is also the hostage.
As someone running a company, this is the nightmare scenario: you owe so much to one entity that they have to keep saving you to protect their own exposure. And every bailout just digs the hole deeper.
That’s not investing. That’s betting on policy.
