Government announces merger of BSNL-MTNL
The government on Wednesday decided to merge the two companies as part of a revival package of loss-making public sector telecom companies MTNL and BSNL. Under the revival plan for these two public sector companies going through financial constraints, government bonds will be issued, assets will be monetized and voluntary retirement scheme (VRS) will be offered for the employees.
Telecom Minister Ravi Shankar Prasad briefed reporters about the decisions taken by the cabinet meeting chaired by Prime Minister Narendra Modi. He said that the government would invest Rs 29,937 crore to bring both public companies back on track. Under the scheme, government bonds worth Rs 15,000 crore will be issued and the property worth Rs 38,000 crore will be sold or leased in the next four years.
Telecom Minister Ravi Shankar Prasad announced that neither BSNL nor MTNL will be closed or be hired by any third party. Significantly, at present, BSNL has 1.65 lakh employees. MTNL and BSANL were also unable to pay their employees salary due to continuous losses. In the year 2018-19, the loss of BSNL had reached Rs 14,000 crore and the income had come down to Rs 19,308 crore.
These two companies have three types of government employees. One who have been appointed directly. Others who have been inducted from other PSU companies or departments and the third is officers of the Indian Tele Communications Service.
The telecom minster said that whenever a natural disaster such as floods, storms occur in any part of the country, BSNL is the first company to provide services for free. 75% of the company’s earnings are used to pay salaries of employees. Other companies spend only five to 10 percent on this item. The company is yet to pay its employees salary for the month of September. However it has announced that it will pay the salary before Diwali.
However, earlier the Finance Ministry was not in favor of running MTNL and BSNL and recommended their closure. Even before the cabinet meeting, a group of ministers headed by Amit Shah approved the revival plan of the two companies. The Finance Ministry disagreed on 80 points of the proposal.
