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Finance Ministry Plans to Close Down BSNL, MTNL, Says Report

According to a report by Financial Express, the cost for providing an attractive voluntary retirement scheme to all 1.65 lakh employees and its debt repayment comes to Rs 95,000 core.

Quashing the revival hopes of Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telecom Nigam Limited (MTNL), the state owned telecommunication companies, the finance ministry is planning to shutdown these public sector units. Overruling the BSNL management’s proposal seeking Rs 74,000 crore for their revival, the Centre has decided to close down the PSUs. But, the costs to shut down the PSUs is calculated as Rs 95,000 crore, higher than that of what BSNL had sought earlier for revival.

According to a report by Financial Express, the Rs 95,000 crore cost was coming in the case of providing an attractive voluntary retirement scheme (VRS) to all 1.65 lakh employees and its debt repayment. But, an attractive VRS is not the requirement of the staff of these two PSUs at the time of closure.

At present, there are three categories of employees in BSNL and MTNL: Indian Telecommunication Services offices; staffs who had come from other PSUs or government departments and later they were absolved in these PSUs; and the third category is of the people who are recruited directly by these PSUs.

If these PSUs are getting shut down, the ITS officers can be deployed to other government departments. Then the staffs who were absorbed earlier have to be retired compulsively. The third category, the direct recruits who are junior staff whose salary is already very low have to suffer.

Also read: Centre’s Move to Introduce VRS in BSNL A Step Towards Privatisation, Says Union

However, BSNL and MTNL have not officially been communicated or any statements issued from the Centre about the closure. When asked about the reports that are being circulated around, a representative from BSNL Employees Union said, “We have been demanding for the revival of BSNL. Since there is no statement from any official sources, we cannot comment about the current news.”

Commenting about the report, former Parliamentarian and Communist Party of India (Marxist) leader Sitaram Yechury took to Twitter to say, “So who could be interested in closing down BSNL and MTNL? Those who advertised on front pages of newspapers, for big corporate rivals of BSNL and MTNL? Helping friends and cronies to destroy the public sector.”

While in April this year, Centre had proposed a VRS scheme as part of reducing the work force. That entire scheme was said to be optional and those attaining 50 years of age can opt for it. At present, BSNL has a manpower of 1.68 lakh employees and MTNL has 22,000. The government estimate at that time said that the VRS scheme for BSNL and MTNL employees will have a revenue impact of Rs 6,365 crore and Rs 2,120 crore, respectively.

Later in June this year, BSNL management had decided to retrench 30% of its contractual work force in the name of cutting down “avoidable expenditure”. Along with this, the upper age limit of the contractual workers has been moved to 58 from 60.

The VRS scheme was introduced as part of the narrative of Department of Telecommunication that BSNL is facing a financial crisis due to over-staffing. But, in 2004-05, when there were a lakh more employees in the company, BSNL had a net profit of Rs 10,000 crore.

Also, the public telecom company has constantly been targeted for making losses. But, BSNL is the only company with the least debt in the entire Indian Telecom industry. “The total debt of BSNL amounts to only Rs. 13,900 crore, whereas the debt of Vodafone idea is Rs 1.2 lakh crore and Airtel has a debt of Rs 1.13 lakh crore. The debt of Jio is about Rs 2 lakh crore. Why was only BSNL denied the permission to take loans?,” Swapan Chakraborty of BSNLEU had told NewsClick earlier.

The union’s demand for allocation of 4G spectrum and financial viability to the company along with others are still pending before the Centre. Despite multiple requests, the Centre has not met these demands yet. So, unions in BSNL are very clear that the work force is not the real problem in BSNL, but the policies of the government are.

Also read: BSNL Revival Plan: Modi Govt Fiddling Like Nero

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