BSNL, MTNL Asks Employees To Retire; Allocates Rs 7400 Crore For VRS Offer!

It is considered to be the most humane or empathetic method of reducing manpower.

BSNL and MTNL will receive financial support of Rs 7,443.57 crore from the government to implement a voluntary retirement scheme or VRS.


Capital Infusion

Under the budget the government will infuse Rs 44,720 crore into loss-making BSNL in the next financial year. 

This capital infusion will go into 4G spectrum, technology up-gradation and restructuring in BSNL.

Apart from this, the Centre will also dole out an additional Rs 7,443.57 crore for the VRS and Rs 3,550 crore as grant-in-aid for payment of GST.

Help In Paying GST Dues

The GST aid will help BSNL pay GST on the allocation of 4G spectrum, according to the Budget documents.

VRS refers to a voluntary retirement scheme under which an employee can choose to voluntarily retire from services before the retirement date.

Through this, companies can reduce the strength of employees.

When Is It Used?

PSUs have to obtain prior approval from the government before implementing the scheme. 

VRS is used by companies that are facing recession, intense competition, joint-ventures with foreign players, takeovers and mergers or obsolescence of product/technology.

The company can then reduce the wage bills of these utilities and free up real estate which can be monetised in the future.

2019 VRS Implementation

It is considered to be the most humane or empathetic method of reducing manpower.

BSNL had used VRS after it was announced in 2019 that it would be merged with MTNL.

According to media reports, over 92,000 BSNL, MTNL staffers opted for VRS.

Payment To Employees

This was regarded as the largest mass retirement of employees in the country.

The employees who opted for VR were paid a lump sum compensation or ex-gratia payment  of 35 days of salary for each year in service and 25 days of salary for each year left until retirement.

BSNL is expected to launch its 4G commercial services in Q2 of fiscal 2022-23 after placing a purchase order (PO) for network equipment procurement by April.

4G Launch By September

The commercial rollout is expected to begin from August-September 2022, confirmed minister of state for Communications Devusinh Chauhan.

In the initial phase BSNL will deploy 4G equipment at 50,000 sites in urban and semi-urban areas.

Chance To Improve Market Share

Its operating expense (opex) of the 4G network rollout is likely to come close to Rs 800 crore per annum.

BSNL chairman Pravin Kumar Purwar said that the company will be in a better market position once it launches its 4G services. 

Its market share had reduced to 9.60%, as per Telecom Regulatory Authority of India’s (Trai) recent statistics.

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