The Cabinet on Wednesday approved a plan for therevival of the financially-stressed state-owned telecom operators Bharat SancharNigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL), sourcessaid.
The sources said that the Centre is planning toprovide nearly a joint amount of Rs. 14,000 crores to both the companies, withRs. 10,000 crores allocated to BSNL and the rest Rs. 4,000 crores to MTNL forthe revival project. The fund will be used to provide for schemes like aVoluntary Retirement Scheme (VRS) for the employees as well as for allocating4G spectrums and monetizing assets so that the state-owned telecom operatorscan contend in the competitive market.
According to reports, the Centre had earlier asked the Department of Telecom to provide a report on a list of assets that are to be leveraged in a time-bound manner, and the steps that needed to be taken to monetize those assets. It was also been advised by the Ministry of Finance to the Cabinet not to provide any financial backing to the state-driven telcos, which have a high revenue-to-wage ratio, on the grounds that any upfront support to BSNL and MTNL would strain budgetary resources of the government.
Prime Minister Narendra Modi-led Cabinet had, therefore,intervened directly in the matter and the DoT had sent the report without theFinance Ministry's response, which it had sought out earlier.
