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New Government To Take Up BSNL, MTNL Revival Plans: Report

Last month, the DoT had floated a draft cabinet note for consultation among ministries on the revival of BSNL and MTNL

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New Government To Take Up BSNL, MTNL Revival Plans: Report

Both BSNL and MTNL have been carved out of DoT


New Delhi: 

The Finance Ministry has asked the Department of Telecommunications (DoT) to re-examine the revival proposals for the telecom firms BSNL and MTNL and submit these to the new government that will take office after the ongoing general elections, a senior official source said on Tuesday.

This implies, according to the source, that there is no immediate move, in the next few months till a new government settles down, to revive both central public sector enterprises (CPSEs). 

Last month, the DoT had floated a draft cabinet note for consultation among ministries on the revival of BSNL and MTNL. 

In response, the Finance Ministry has now asked the DoT to rework the proposals, indicating both the steps and the financial outgo involved and submit these to the new government.

The two key issues in the revival proposal are the voluntary retirement scheme (VRS) and allocation of 4G spectrum. 

According to the source, both Finance Ministry and DoT are of the view that there may not be any need to consider financial support to the companies for VRS since the employees of these telcos are covered by the government pension rules relevant for CPSEs carved out of ministries. 

Both BSNL and MTNL have been carved out of DoT. 

The issue of allocation of 4G spectrum has also been left for consideration of the next government at the Centre, the source added.

Another key component of the revival proposal concerns the monetisation of the assets of BSNL and MTNL.

According to the source, it is to yet to be decided as to who, between the Department of Investment and Public Asset Management (DIPAM) and the DoT, will carry out the mutation process involved in monetising assets. 

Mutation is the recording of a transfer of title of a property from one person to another in the revenue records. The documentation procedure to be followed and the fee payable in mutation varies from state to state. 

DIPAM has an asset monetisation framework which lays down the procedures for the administrative ministries to follow in selling off CPSE assets. 

The titles to the lands and buildings of BSNL and MTNL are still with the DoT. 

Both companies have sought spectrum for 4G services through equity infusion from the government. 

BSNL, which has the lowest debt of Rs 14,000 crore among all telecom operators, has sought 4G spectrum across India through equity infusion of Rs 7,000 crore. The total cost of the spectrum will be Rs 14,000 crore

Both firms have asked for a VRS for employees similar to the Gujarat model. 

The VRS scheme for BSNL and MTNL will have a respective revenue impact of Rs 6,365 crore and Rs 2,120 crore.



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