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Government allocates 1000 crores to BSNL and MTNL to clear February wages

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PSUs BSNL and MTNL have suffered tremendous loss due to low – tariff and unavailability of 4G spectrum. The loss is so huge that they are not able to pay-off the wages. Government came to the rescue and allocated Rs. 1000 crores to clear their wage bill.

A senior official of the Department of Telecom (DoT) said BSNL will clear about Rs 850 crore dues of its employees before Holi (March 21). MTNL was given Rs 171 crore on Monday and instructed to pay salaries by Wednesday.

Due to stiff competition in a low-tariff market and crippled by lack of services due to no 4G spectrum, a huge work force of 1.76 lakh and without Delhi and Mumbai as operational bases, BSNL’s profitability has suffered heavily in recent years. It’s losses widened to Rs 7,992 crore in 2017-18.

According to financial data shared by the Telecom Minister in the Lok Sabha, the company posted a loss of Rs 4,793 crore in 2016-17.

MTNL too has been on the decline. Its Q3FY19 losses widened to Rs 833 crore. The government has been footing the bill for monthly salaries of its 23,000 employees since November 2018.

While BSNL’s annual wage bill is Rs 15,000 crore, which is 85 per cent of its revenue, MTNL’s yearly wage bill is Rs 2,500 crore, 95 per cent of its revenue. In contrast, the salary bills of private operators are less than 10 per cent of their revenues.

It’s quite depressing that these already established PSUs have to rely on government. Not able to generate any profit is a failure for any company. Not only BSNL and MTNL but also many PSUs suffer from the same fate. They are walking on the crutches of government. These PSU should introspect and find why they are incompetent despite hiring the best talent pool through national level exams.

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