The finance ministry has recommended the closure of struggling telecom companies BSNL and MTNL, Financial Express has reported.
The cost of closing the two state-run companies would not be as high as Rs 95,000 crore, a number put out by the Department of Telecommunications (DoT), the report said.
The sum of Rs 95,000 crore factored in a voluntary retirement scheme (VRS) for all 1.65 lakh BSNL employees and its debt repayment, the report said.
The government has rejected DoT’s request for a Rs 74,000-crore bailout package for BSNL and MTNL, an earlier report in the newspaper had said.
Moneycontrol could not independently verify the story.
There are three categories of staff at the two public sector units–those directly recruited, staff who were transferred from other PSUs or government departments and absorbed, and the officers of the Indian Telecommunications Service (ITS).
If the classification was done along these lines, the cost of closure might be lower than Rs 95,000 crore, the report said.
This is because ITS officers can be redeployed to other government departments and needn’t be given VRS. Further, direct recruits involve most junior staff, whose salary is not very high, and make up only 10 percent of the total workforce.
BSNL and MTNL have been asked to identify staff strength under each category to help calculate the full cost of closing the two companies, sources told the newspaper.Get access to India’s fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code “GETPRO”. Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.