BSNLs Finance Needs To Be Strengthened

New Delhi, Aug 20: | Updated: Aug 21 2003, 05:30am hrs
Communication minister Arun Shourie on Wednesday sought extension of financial package to state- owned Bharat Sanchar Nigam Ltd beyond March 2004 in the wake of heavy financial burden due to social obligations.

We need to strengthen the financial position of BSNL. We must commend their performance but to continue the pace of growth the financial package must be extended, Mr Shourie said.

Asked about the status of communication ministrys proposal for an over Rs 18,000 crore financial package, the minister said, We have sent the cabinet note to the concerned ministries.

We are not asking for any additional financial benefit from the finance ministry. We have just said that package available to them (BSNL) till March 31, 2004 should be extended for the 10th five year plan, he added. He said this required to offset the tremendous pressure on BSNL on account of providing affordable service across the country. Everytime there is readjustment of tariffs, there is hue and cry over the issue and BSNL has to roll back. Last time also it happened and BSNL had to take hit of about Rs 3,300 crore, Mr Shourie said.

Early this month, minister of state for communication Ashok Pradhan had said in the Lok Sabha that the government was considering a financial package of Rs 18,515 crore for BSNL. The financial support to BSNL to the tune of Rs 18,515 crore for a period of five years, upto the end of 10th five year plan for providing services in rural areas is under consideration of the government, he had said. The financial support includes reimbursement of license fees, spectrum charges and extension of moratorium on repayment of principal and interest on government loans beyond 2004.

According to sources, ministry of finance had raised objections to BSNLs package, saying that there has to be level playing field between private service providers and the public sector undertakings. With regard to rural area obligations, ministry of finance had said responsibility should be equally distributed among all service providers including private operators while for the reimbursement of license fee, the ministry of finance was of the view that there has to be a level playing field.