In a move that would bring relief to nearly 43,000 employees of Mahanagar Telephone Nigam Ltd, the Union Cabinet has approved a pension payment plan that will lead to an annual pay out of Rs 500 crore.
Under the approved plan, all categories (Group A, B, C & D) of employees of the government absorbed in MTNL and who have opted for combined service will be given similar treatment in the matter of payment of pensionary benefits as available to the absorbed employees of BSNL.
This would help resolve the long-pending MTNL pension issue. The employees union of MTNL had earlier agreed to the Government’s proposal to bring parity of pay scales with their counterparts in Bharat Sanchar Nigam Ltd. This will be done at the time of next wage revision in 2017. In exchange, the Government will finance the pension burden of MTNL partially.
At present, MTNL workers get higher pay compared to BSNL employees. The liability of the Government towards pension of absorbed employees of MTNL will be restricted to the equivalent scales of similarly placed employees in BSNL. In case, MTNL decides to pay pension on the basis of existing pay scales, the liability arising from the same shall be borne by MTNL. High wage costs have been a concern for MTNL. Salary and pension expenses of MTNL employees are more than its revenues. MTNL contribution up to December 31, 2005, will be on the maximum of the IDA pay-scales and from January 1, 2006, on the actual pay drawn.
Revival plan This is part of Government’s plan to revive BSNL and MTNL. In addition to the pay scale, the Department of Telecom has presented to the EGoM a multi-pronged strategy to revive the two PSUs. This includes refunding the money paid by the two companies for buying broadband spectrum.
BSNL and MTNL had taken broadband spectrum in 2009 without participating in the auction. They were told to pay the final bid price quoted by private players. As a result, BSNL ended up paying Rs 8,300 crore, and MTNL Rs 4,500 crore.