The union cabinet on Wednesday approved a revival plan for fiscally strapped BSNL and MTNL.
The union cabinet on Wednesday approved a revival plan for fiscally strapped BSNL and MTNL. The government is mulling over the merger of MTNL with BSNL to bring about their revival, Telecom Minister Ravi Shankar Prasad said in the cabinet briefing. The government will put in Rs 29,937 crore for revival of the two state-owned telecom companies. The revival package includes raising of Rs 15,000 crore sovereign bonds and monetising Rs 38,000 crore of assets in the next four years, he added. “MTNL, BSNL are neither being closed nor divested,” he added. The revival plan will also include 4G spectrum and support for voluntary retirement schemes (VRS). The VRS will be offered to employees to cut cost, he added.
The two distressed telecom firms have been incurring losses and have been facing problems in clearing staff salaries in the recent past. BSNL’s loss is estimated to be around Rs 14,000 crore with a revenue fall of Rs 19,308 crore during FY19. In 2017-18, the provisional loss of BSNL was Rs 7,993 crore and is estimated to swell to Rs 14,202 crore in 2018-19, according to information presented in Parliament. The number of employees in BSNL stood at about 1,65,179.
On October 10, BSNL had said that a revival plan of the company is under active consideration of the government, news agency PTI reported. The firm also said that the plan includes a package comprising components such as VRS and 4G spectrum and allowing monetisation of assets available with it.
“…it is clarified that there is a plan under active consideration for the revival of BSNL by Government of India by giving suitable package in terms of VRS/4G spectrum and allowing monetisation of assets available with BSNL,” it said in a statement.
Meanwhile, the union cabinet also approved a hike in minimum support price (MSP) of winter crops in today’s meeting, CNBC TV-18 reported. It was also decided to relax norms for setting up of petrol pumps across the country by the government, the report added. In September this year, the Union Cabinet approved a blanket ban on e-cigarettes in the country with a complete suspension of its manufacturing, import, export, distribution, and storage.