‘BSNL and MTNL to Shutdown’ as proposed by Finance ministry

The finance ministry has recommended the closure of struggling telecom companies BSNL and MTNL, Financial Express has reported.

The government has rejected DoT’s request for a Rs 74,000-crore bailout package for BSNL and MTNL, an earlier report in the newspaper had said.

As per some insiders, in case Govt. wants to disinvest in BSNL, and invite private players to run the company, there won’t be many who would be interested.

And Rs 74,000 crore bailout package is too much for Govt. to spend.

If Govt decides to close the 2 PSU’s then they need to spend Rs 95,000 crore as argued by the DoT while making a case for a Rs 74,000-crore revival package. The Rs 95,000-crore cost was coming in the case of providing VRS to all 1.65 lakh BSNL employees and its debt repayment.

BSNL and MTNL have been asked to identify staff strength under each category to help calculate the full cost of closing the two companies

There are three types of employees in BSNL:

  1. Indian Telecommunications Officers – who would be redeployed to other Government departments.
  2. Junior technical staff – who have been directly hired, and are too young for any retirement package. They are less than 10% of the total staff strength.
  3. Employees who have been absorbed from other Govt. departments, and PSUs, and most of them are hovering around 50-60 years of age.

Govt. will need to spend some money to provide them VRS, which is certainly not Rs 95,000 crore.

If the cost of closure is calculated on the basis of segregating the staff in these three broad categories, then it would be much less than Rs 95,000 crore.

We will keep you updated on the future of BSNL and MTNL in coming days…

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