BSNL may delay salary payout in September too

Rajesh Kurup Mumbai | Updated on September 30, 2019

BSNL will pay only a part of its vendors’ charges and operational expenses to ensure there is no disruption in services   -  SOMASHEKAR GRN

‘Not enough funds for wages, as major portion needed for operational expenses’

State-run Bharat Sanchar Nigam Ltd (BSNL) is staring at another salary delay, with the ailing telecom firm expected to credit employees’ wages for September 15-20 days late.

This comes even as a crucial meeting convened on Thursday to decide on a revival package for the Public Sector Unit (PSU) ended inconclusively.

“There isn’t enough money coming in from internal accruals. Even though BSNL is generating about ₹1,400 crore per month, this is not adequate to cover the wages, as a major portion of the proceeds is required for operational expenses and statutory payments,” a source close to the development told BusinessLine.

“The company is definitely staring at another salary default,” added the source.

The operational expenses include electricity bills, labour costs, rent (for towers and rural exchanges), transportation costs and fuel costs (vehicles and towers). The statutory payments include Tax Deducted at Source (TDS), Employee’s Provident Fund (EPF) and Goods and Services Tax (GST), among others.

Fourth default

BSNL will pay only a part of the vendors’ charges and operational expenses, the bare minimum required to ensure there is no disruption of services. But it will have to make the entire statutory payments, whether it has funds to pay the salary or not, another source confirmed. The sources declined to be identified as the company is yet to make an official announcement.

As per company policy, salaries are credited on the last working day of every month. BSNL’s salary expenses come to about ₹750-850 crore, as the firm employs 1,63,902 personnel, of which 46,597 are executives and 1,17,305 non-executives.

This would be the fourth time the company would be missing the due date. BSNL had paid the August salary after an 18 days’ lag, while July’s staff wages were footed on August 5, after February salary paid later in March. The employees are expected to move BSNL management, through various unions, seeking early disbursal of salary.

Inconclusive meeting

Meanwhile, the crucial meeting convened by PK Mishra, Principal Secretary to the Prime Minister, to decide on the fate of the ailing PSU, ended inconclusively.

“The meeting, which ran late into the evening, could not come to a conclusive decision, mainly on whether it’s possible to revive BSNL. This was a crucial meeting, but now the fate of the firm is still unclear,” said another source.

A Group of Secretaries was asked to study the matter in the next 4-5 days and reach a consensus. In case they agree that the PSU can be revived, then further decisions regarding the modes of funding and setting up Special Purpose Vehicles (SPVs) among others will be finalised.

Apart from Mishra, BSNL Chairman and Managing Director PK Purwar, top officials from BSNL and MTNL, officials from the PMO, Telecom and Finance Ministries, Department of Telecommunications (DoT) and the government think-tank NITI Aayog attended the meeting.

Consultation on 4G spectrum allocation

The Telecom Regulatory Authority of India (TRAI) will hold a consultation on allocation of 4G spectrum for BSNL and MTNL soon. The companies had earlier sought 4G spectrum in lieu of equity.

BSNL is still awaiting allocation of 4G spectrum. Both Mahanagar Telephone Nigam Ltd (MTNL) and BSNL don’t have 4G spectrum, though the latter is providing 4G services using new Base Transceiver Stations (BTS) in certain circles.

The service is provided using 3G spectrum, but BSNL needs 4G spectrum to provide both 3G and 4G services simultaneously in an area covered by a single BTS.

The miniratna company had sought 4G spectrum in 2017, but is yet to be awarded. The government wants guarantees that the allocation of 4G spectrum would help in BSNL’s revival.

Published on September 30, 2019

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