Capital infusion of over Rs 20,000 crore, government to bear cost of VRS
GN Bureau | October 23, 2019
The union cabinet on Wednesday approved the proposal for revival of public sector telephony companies BSNL and MTNL by administrative allotment of spectrum for 4G services, debt restructuring by raising of bonds with sovereign guarantee, reducing employee costs, monetisation of assets and in-principle approval of merger of BSNL & MTNL.
The two firms have been in dire straits for long, and there were speculations over its future, but telecom minister Ravi Shankar Prasad told reporters after the cabinet meet that the two are neither being closed nor being divested.
The cabinet decided to go for administrative allotment of spectrum for 4G services to BSNL and MTNL so as to enable the two to provide broadband and other data services. The spectrum will be funded by the government by capital infusion in at a value of Rs 20,140 crore. In addition, the GST amount of Rs 3,674 crore will also be borne by the government through budgetary resources.
By using this spectrum allotment, BSNL and MTNL will be able to deliver 4G services, compete in the market and provide high-speed data using their vast network including in rural areas.
BSNL and MTNL will also raise long-term bonds of Rs 15,000 crore for which sovereign guarantee will be provided by the government, an official release said. With these resources, BSNL and MTNL will restructure their existing debt and also partly meet capex, opex and other requirements.
The two firms will also offer “attractive voluntary retirement scheme (VRS)” to their employees aged 50 years and above, the cost of which will be borne by the government through budgetary support. The ex-gratia component of VRS will require Rs. 17,169 crore. The government will also meet the cost towards pension, gratuity and commutation. Details of the scheme will be finalised by BSNL/MTNL.
BSNL and MTNL will monetise their assets so as to raise resources for retiring debt, servicing of bonds, network upgradation, expansion and meeting the operational fund requirements.
The cabinet granted in-principle nod to the merger of BSNL and MTNL. “It is expected that with the implementation of said revival plan, BSNL and MTNL will be able to provide reliable and quality services through its robust telecommunication network throughout the country including rural and remote areas,” the official note added.
News profession is organic in nature, requires responsibility and discipline, and there is no room for mistake. To maintain high standards of accuracy you need discipline and hygiene in the newsroom. Sudhir Chaudhary, editor in chief of Zee News, Zee Business and Wion, has said that a TRP-driven business m
When Dharmendra Pandey, a fruit-seller had to leave Mumbai after the imposition of the lockdown during the Covid-19 pandemic, and return to his village in Uttar Pradesh, he was staring at economic uncertainties ahead. Little did he know that his 16-year-old son, Mahavir, had acquired skills that would come
Wearing a face mask is the first line of defence against the novel coronavirus, along with maintaining social distance and frequently washing hands with soap. More than six months after the outbreak of Covid-19, nearly 90 percent of people in India have become aware of the necessity of wearing a face mask,
Is India finally gaining an upper hand over the Covid-19 pandemic? After weeks of new cases hitting 90,000-plus every day, the tide seems to be turning, as the number came down to 75,083 on Tuesday, and the recoveries were not only higher than that but crossed the 1 lakh mark too. The countr
Sit Your Self Down A Novice’s Journey into the Heart of Vipassana By Gayatri Jayaraman Hachette India, 212 pages, Rs 399 As stress and strife increase in daily life, more and more people are turning to meditation as an all
On completion of one year of the chairmanship of the Association of World Election Bodies (A-WEB), the Election Commission (EC) of India on Monday hosted an international webinar on the theme of “Issues, Challenges and Protocols for Conducting Elections during COVID-19 : Sharing Country