The Centre's in-principle nod to merge the ailing public sector telecos Mahanagar Telephone Nigam Limited (MTNL) and Bharat Sanchar Nigam Limited (BSNL) got a thumbs down today from Congress's Rahul Gandhi.
Tweeting with the hashtag #BsnlMtnlMerger, the senior Congress leader made a series of 'predictions'. "Step 1: Merge. Step 2: Mismanage. Step 3: Show Mega Losses. Step 4: Sell Cheap to Crony Capitalist," his tweet read.
The two public sector companies have been under huge pressure due to competitive tariffs and huge debts. The total debt on both the companies is around Rs 40,000 crore, of which half of the liability is on MTNL, which operates in Delhi and Mumbai.
In 2015, the BSNL submitted a proposal to the government for 4G spectrum allocation and sought approval for a voluntary retirement scheme (VRS) package. The government's approval came today.
"The government is neither closing nor divesting stake in MTNL and BSNL," Union Minister Ravi Shankar Prasad told the media.
The turnaround plan includes monetisation of assets worth Rs. 38,000 crore owned by the two companies over the next four years. The government has also planned to raise Rs. 15,000 crore via sovereign bonds, which will be serviced by MTNL and BSNL, Mr Prasad said.
The government also plans to bear GST or Goods and Services Tax of Rs. 3,674 crore for 4G spectrum. The allocation will allow the firms to compete in the market and provide high speed data using their vast network.
The Cabinet also cleared capital infusion of Rs. 20,140 crore in MTNL and BSNL to equip them with additional spectrum which will enable them to deliver 4G services.
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