Finance Ministry is planning to close down BSNL and MTNL

After rejecting the proposal of the department of telecommunication to revive the ailing BSNL and MTNL by pumping in ₹74,000 crores, the finance ministry has suggested closure of both the PSUs.

According to Financial Express, the closure of the two PSUs won’t cost as high as ₹95,000 crore as argued by the DoT. The ₹95,000 crores revival package would have been used to provide voluntary retirement scheme to all the 1.5 Lakh BSNL employees and to repay the debts.

In the case of closure, the Indian Telecommunication Service (ITS) officers do not have to opt for VRS as they can be shifted to other governmental departments. The employees who have been directly employed by the company are mostly junior staff and technicians whose salaries are not very high, and their total strength is not more than 10%. It is the absorbed staff who are going to be the get most affected. They need to be compulsorily retired.

According to the Financial Express, the cost of closure is calculated based on these three categories, and then it would be much less than ₹95,000 crore. Financial Express reports that both the companies have been asked to identify the staff strength to calculate the total cost.

The components of the revival package which was drawn by the DoT was — the VRS payout would be cost ₹29.182 crores, ₹10,993 crores would be allotted to retiral benefits by advancing the retirement age from 60 to 58 years. The companies would have been allotted the 4G spectrum for ₹20,410 crores and another ₹13,202 crores would be the capex required to roll out the 4G services.

Strategic disinvestment of BSNL or MTNL has been ruled out as there would not be any takers for it considering the current financial stress in the telecom industry.