BSNL has requested Rs 15,000 crore from the finance ministry to cover the costs of the VRS rollout
The Department of Telecommunications (DoT) is preparing to seek approval from the finance ministry for a second voluntary retirement scheme (VRS) at Bharat Sanchar Nigam Limited (BSNL) as part of an effort to reduce its workforce by 35% and improve the company’s financial situation, according to an Economic Times (ET) report.
Read More: Forex reserves fall to over 7-month-low, current account deficit moderates: RBI
BSNL has requested Rs 15,000 crore from the finance ministry to fund the VRS implementation. The state-owned operator’s board has proposed cutting its employee base by 18,000 to 19,000 through the scheme, aiming to bolster the company’s balance sheet, an official familiar with the matter told ET.
Currently, BSNL allocates approximately Rs 7,500 crore, or about 38% of its revenue, to employee salaries. The company plans to reduce this expenditure to Rs 5,000 crore annually as part of a broader effort to streamline operations. The report added that once the finance ministry approves, the communications ministry will seek Cabinet approval for the initiative.
Read More: Petrol, Diesel Fresh Prices Announced: Know Fuel Rates In Your City On December 28
BSNL’s board approved the VRS programme on Monday to reduce its wage bill, especially as the company has not yet launched its 4G services nationwide. However, a senior BSNL official informed ET that the VRS plan is still under internal discussion, and no final decision has been made. ET also reported that BSNL has not yet responded to queries. News18.com was unable to verify the report independently.
For FY24, BSNL’s revenue reached Rs 21,302 crore, showing a slight increase from the previous year. The company’s workforce includes more than 30,000 non-executive employees and 25,000 executives.
In 2019, the government approved a Rs 69,000-crore revival plan for BSNL and Mahanagar Telephone Nigam Limited (MTNL), which included an early retirement programme that saw 93,000 employees opt for separation. The ex-gratia component of this VRS amounted to roughly Rs 17,500 crore, covering pension, gratuity, and commutation costs.
Read More: Today Gold Rate 28-12-2024: Check latest prices in your city
MTNL, which operates only in Delhi and Mumbai, relies on BSNL for its mobile network. The revival plan also included asset monetisation and the allocation of 4G spectrum to both public sector telecoms.
In 2022, the Centre approved a second revival package worth Rs 1.64 lakh crore for BSNL and MTNL, which provided financial support to de-stress their balance sheets, fund capital expenditures, settle adjusted gross revenue (AGR) dues, and support viability gap funding (VGF) for rural landline connections.
In 2023, a third revival package of Rs 89,000 crore was approved, focusing on 4G and 5G spectrum allocation, with plans to offer commercial data services, fixed wireless access (FWA), and captive private networks.
