Centre Mulls Rs 74,000 Crore Bailout Plan To Rescue Loss-Making Telecom PSUs MTNL And BSNL

BSNL headquarters (KuwarOnline/Wikimedia Commons)

The Centre is mulling on a Rs 74,000 crore bailout plan for the loss-making state-owned telecom companies Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL), reports Economic Times.

According to the report, the government’s strategy involves offering a lucrative exit package to thousands of employees, including an additional 5 per cent compensation (ex-gratia) to make the VRS attractive, while providing for 4G spectrum and capital expenditure

As per the officials familiar with the proposal, for which a draft Cabinet note has been circulated, the government will allot 4G spectrum valued at over Rs 20,000 crore for the two telecom public sector undertakings (PSUs) while the roll-out cost of around Rs 13,000 crore will be paid by the PSUs.


The government will also provide over Rs 40,000 crore towards the VRS package and retirement benefits.

The department of telecom has reportedly made a case for the bailout of the two PSUs by arguing that closing them down will cost Rs 1.2 lakh crore and is therefore not viable.

As per the report, BSNL is the biggest loss-making PSU of the country in FY19 with an estimated loss of Rs 13,804 crore while MTNL was third with a loss of Rs 3,398 crore.

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