Fixing bloated wage bills is key to making PSUs viable

Jan 10 2014, 19:55 IST
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PSU telco BSNL, for instance, has projected revenue growth of 47% over the next four years. PTI PSU telco BSNL, for instance, has projected revenue growth of 47% over the next four years. PTI
SummaryPSU telco BSNL, for instance, has projected revenue growth of 47% over the next four years.

While it looks at ways to make PSU telcos BSNL and MTNL viable — it did a similar exercise for Air India last year — the government would do well not to get distracted by the fancy numbers put out by the PSUs. BSNL, for instance, has projected revenue growth of 47% over the next four years.

Given the competition is unlikely to stay still, the chances of PSUs raising their market shares in a significant manner are low. Meanwhile, as the table shows, their wage bills are killing. How can MTNL compete with a Bharti Airtel if its wage bill is 154% of its revenues versus under 5% for Bharti Airtel? SAIL is in a similar mess.

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