Sale of Rs 3,000 crores worth of property owned by Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) has been given green light by the Indian Government’s Inter-Ministerial Group (IMG).
On the basis of new valuation formula, the government will soon invite bids for these properties.
IMG to Sell Off Property to Raise Funds Through Disinvestment
The selling off these properties is a part of government’s ongoing efforts to raise funds through disinvestment. These state-owned telecommunications companies’ properties are located in Delhi, Hyderabad, and Lucknow. The Disinvestment Department will soon start inviting bids for the properties
The change in the valuation formula of these properties has also been given by IMG. But why fix what is not broken?
New valuation formula came to existence as the older one had some flaws. The New formula would only consider the independent value of the properties, rather than their book value as recorded by the companies.
The older one have inflated the value of their properties in books.
The government’s previous attempts to sell these properties failed due to the increased prices, as there were no bids. However, with the new valuation formula in place, the government hopes to sell the properties this financial year. This move is in line with the government’s efforts to revive BSNL and MTNL, which have been struggling financially in recent years.
More about BSNL, MTNL
A central PSU headquartered in New Delhi, India, BSNL is under the ownership of Department of Telecommunications, Ministry of Communications, Government of India. It was incorporated on 1 October 2000 by the Government of India.
It provides mobile voice and internet services through its nationwide telecommunications network across India. It is the largest government-owned-wireless telecommunications service provider in India.
Headquartered in New Delhi, India, MTNL is a wholly owned subsidiary of Bharat Sanchar Nigam Limited which is in turn under the ownership of Department of Telecommunications, Ministry of Communications, Government of India.
MTNL Provides services in the metro cities of Mumbai and New Delhi in India and in the island nation of Mauritius in Africa. It had a monopoly in Mumbai and New Delhi until 1992, when the telecom sector was opened to other service providers. “Transparency makes us different” is its motto. The Bharat Sanchar Nigam Limited currently holds 100% of its stock. As of June 2021, it has 3.28 million subscribers. It is also a wholly owned subsidiary of a central public sector unit.