A total of 78,569 employees of Bharat Sanchar Nigam Limited (BSNL) and 14,387 from Mahanagar Telecommunications Nigam Limited (MTNL) who had opted for VRS (voluntary retirement scheme) are now being paid their dues. An amount of over ₹10,000 crore has been released by the government on this score. The last date to opt for VRS was December 3, 2019.
The split up of this amount is ₹9,000 crore by BSNL and ₹1,050 crore by MTNL. The BSNL figure is further split into ₹4,100 crore on account of ex-gratia payment and the balance ₹4,900 crore towards leave encashment. The payments made to the MTNL employees was largely on account of leave encashment, EPF, CPF and gratuity. This forms around a third of the ₹29,937 crore the government has agreed to release for the settlement of the dues of the staff of the two companies. BSNL and MTNL will be merged to operate as a single entity.
The government also wants the public sector telecom operator to complete with the private players. Moneys will be released to launch the 4G service in a big way. This has been a handicap for BSNL and MTNL to compete with Bharti Airtel, Vodafone Idea and now Reliance Jio.
It is still a gamble to turn the companies around. The private players are also struggling to stay afloat. The AGR (adjusted gross revenue) dues judgement has pulled the rug under their feet and it is again the central government that has come to their rescue by spreading the payment schedule over several years.
The Narendra Modi government earlier took a call to revive the two state-run telecom companies BSNL and MTNL. A detailed ₹70,000 crore plan was agreed to, between the government and the two companies. One of the key steps was to drastically cut down on the number of employees of the companies by offering voluntary retirement. The salary outgo each month alone was more than the overall revenue earned and the companies were constantly posting heavy losses.