- The Center expects to save nearly 50 percent or Rs 7,500 crore from the Bharat Sanchar Nigam Limited (BSNL) wage bill from the existing Rs 14 annual budget, 155 crores, following the Voluntary Retirement Scheme (VRS) to 80,000 employees.
- “The 30-day VRS window opens on Monday, and employees eligible to submit applications have been requested by management and unions. Under the proposed VRS formula, employees will receive from BSNL and Mahanagar Telephone Nigam Limited (MTNL) employees 100-125 percent of the salary for the remaining years of service, including pension, based on the monthly retirement wage.
The Center expects to save nearly 50 percent or Rs 7,500 crore from the Bharat Sanchar Nigam Limited (BSNL) wage bill from the existing Rs 14 annual budget, 155 crores, following the Voluntary Retirement Scheme (VRS) to 80,000 employees.
The state-controlled telecommunications service provider hires almost 1,59 lakh employees, including 1,05 lakh people who have already reached 50 years of age.
“The government will bear the ex-gratia payment for approximately 80,000 employees of approximately Rs. 14,800 crore,” according to the details of the recently approved ETT revival package.
However, the VRS program will be opened by an enterprise resource planning (ERP) platform for a period of 30 days.
“The 30-day VRS window opens on Monday, and employees eligible to submit applications have been requested by management and unions. Under the proposed VRS formula, employees will receive from BSNL and Mahanagar Telephone Nigam Limited (MTNL) employees 100-125 percent of the salary for the remaining years of service, including pension, based on the monthly retirement wage. On Wednesday, the panel is expected to present its findings.
The huge revenue-to-wage ratio from huge headcount is one of BSNL’s biggest concerns, which spends nearly 75 percent of its revenue on monthly wage disbursement.
In 2018-19, out of Rs 7,993 crore in 2017-18, BSNL’s total revenue stood at Rs 19,308 crore with loss ballooning to Rs 14,202 crore.
The broad contours of the government-funded retirement program include benefits up to 60 years of age for the remaining duration based on monthly retirement salaries.
The government also proposed providing ex-gratia along with an outstanding pension or 125 percent of the salary for the remaining service based on the monthly retirement pay, whichever is lower.
The ex-gratia would be paid in two installments, according to BSNL officials— in 2020-21 in 2019-20 and Q1.
Nevertheless, a gratuity would be charged for those under the age of 60 or 5 years of retirement, whichever is earlier. The gratuity would be paid immediately in the event of death.
Last week, Prime Minister Narendra Modi-headed Cabinet approved a Rs 70,000 crore relief package for two-state carriers with VRS as a key component in addition to monetizing real estate assets and allocating 4th-generation or 4 G airwaves.
The government would also monetize Rs 38,000 crore worth of land and property to repay debt and associated interest payments as well as financial capital and operating expenses for the two telcos.
Meanwhile, for their revival plans, both BSNL and Mahanagar Telephone Nigam Ltd (MTNL) received approval from the Department of Telecommunications. The letter of 29 October approved a reduction in employee costs, regulatory spectrum allocation for 4 G services, debt restructuring by bonds, asset monetization, and BSNL and MTNL merger.
Recently, To revive loss-making telecom PSUs BSNL and MTNL, today’s government decided to merge the two ailing companies. MTNL will be paired with BSNL as part of the revival kit. Until that happens, MTNL will operate as a BSNL subsidiary. MTNL is listed but has already eroded its net value. BSNL has not been listed.
