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A Group of Ministers (GoM) meeting on Tuesday will discuss issues pertaining to revival of BSNL and MTNL.
Sources told BusinessLine that the recently constituted GoM is headed by Home Minister Amit Shah and has Telecom Minister Ravi Shankar Prasad and Finance Minister Nirmala Sitharaman among others as the members. The GoM will meet within the Parliament premises and discuss the possibilities of reviving both public sector telecom entities.
The Telecom Minister Prasad on his first day of taking office had said that the government will work on the revival of both the companies. But, in the meantime, the BSNL and MTNL employees will have to pull up their socks to compete with private players.
First step
Prasad had also written to the Finance Minister to consider providing ₹1,000 crore as a separate budgetary allocation for the revival.
In his letter to the Finance Minister before the Budget, Prasad had written, “The Department (Telecom) is preparing a comprehensive revival plan for BSNL/ MTNL. This is required to ensure the presence of the public sector in order to maintain a balance in the sector. In this regard, a Cabinet Note is being moved shortly.”
“Accordingly, in the Budget announcement, a mention may be made that a separate budgetary allocation is being provided for revival of BSNL and MTNL. An amount of ₹1,000 crore may be provided for the same in Budget accordingly,” he wrote.
However, there was no mention or provision of any amount in the Budget. Both the companies have a large employee base (BSNL 1.66 lakh and MTNL 21,679) and one of the revival plans the government is thinking is that of giving voluntary retirement schemes to these employees (around 74,000 of BSNL and 12,500 of MTNL) because more than 60 per cent of revenues of both the companies go to salaries.
Mounting loss
While the net loss of BSNL has increased to ₹13,804 crore in 2018-19 (from ₹4,793 crore in 2016-17), MTNL’s net loss increased to ₹.3,398 crore in 2018-19 from ₹2,971 crore in 2016-17 .
BSNL’s revenue last year came down to ₹18,865 crore from ₹31,533 crore in 2016-17. Similarly, MTNL’s revenue that stood at ₹3,552 crore in 2016-17 has come down to ₹2,607 crore in 2018-19.
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