On Wednesday, the Union Cabinet approved a revival package of Rs 29,937 crore for the state-owned telecom companies BSNL (Bharat Sanchar Nigam Limited) and MTNL (Mahanagar Telecom Nigam Limited) and allowed an in-principle merger of the two. BSNL will absorb MTNL, to act as a subsidiary post the merger.
The government also said that attractive VRS (voluntary retirement scheme) packages will be offered to employees of both the companies.
MTNL and BSNL will neither be closed nor divested, said Union Telecom Minister Ravi Shankar Prasad addressing the press after the Cabinet meeting.
Union #Cabinet approves the revival plan of @BSNLCorporate and @MTNLOfficial and in-principle merger of the two.— PIB India (@PIB_India) October 23, 2019
Attractive VRS packages to be offered. #CabinetDecisions @rsprasad @PrakashJavdekar pic.twitter.com/8pB5PEZnmS
The revival package will include raising sovereign bonds worth Rs 15,000 crore, monetising assets of Rs 38,000 crore in the next four years and voluntary retirement scheme (VRS) for employees.
Prasad also announced the allocation of 4G spectrum to BSNL and MTNL. Explaining the VRS package, Prasad said as an example, any employee above the age of 53 and a half, opting for the VRS, will be given 125 percent remuneration of the salary, pension and gratuity till the age of 60.
BSNL, which has a staff of 1.76 lakh and has been facing difficulties in paying salaries to its employees in the recent past on mounting losses. It suffered a net loss of Rs 13,804 crore for the financial year 2018-19.
MTNL has 22,000 employees.