Govt plans relief for debt-laden BSNL, MTNL through revival package

Union government's financial support to the public sector undertakings in the telecom space -- Bharat Sanchar Nigam Ltd and Mahanagar Telephone Nigam Ltd -- has risen in the current financial year as it prepares a revival package to de-stress these debt-laden entities.

While overall budgetary allocation for telecom PSUs has gone down by 15%, the one in BSNL and MTNL has gone up for the current fiscal (2019-20).

The total investment in the six telecom PSUs for the current year is Rs 14,025.90 crore as against an allocation of Rs 16,468.39 crore in the revised estimates, last financial year (2018-19). The same was Rs12,186.9 crore in 2017-18.

Interestingly, of the total allocation during the fiscal, budgetary support is to the tune of Rs 105 crore and the remaining Rs 13,920.90 crore is the IEBR or Internal and Extra Budgetary Resources, which is essentially raised by the PSU itself in the form of profit, debt and equity.

The budgetary support of Rs 105 crore is for the company Indian Telephone Industries or ITI Ltd is the central government-owned telecom equipment manufacturer.

The provision is for providing financial relief/equity infusion to ITI Ltd.

Fund raising to the tune of Rs 6500 crore has been approved for the Bharat Broadband Network Ltd towards creation of telecom

infrastructure required for providing broadband connectivity to all the 2.5 lakh Gram Panchayats in the country and facilitating non-discriminatory access to service providers, for provisioning of broadband services in rural area.

The list of telecom PSUs also includes Telecommunications Consultants India Limited, engineering and consultancy firm and Centre for Development of Telematics (C-DOT), telecommunications technology development centre.

The rise in allocation for BSNL and MTNL can be seen as a step towards revival of the two companies, which are grappling with financial stress.

An Rs 6725 crore IEBR or fund raising exercise has been approved for BSNL and for MTNL a sum of Rs 498.26 crore has received the green signal.

The provision is for pensionary benefits of the employees of the DOT including employees absorbed in BSNL and employees of MTNL with effect from April 1, 2014.

The budget has also provisioned for payment of interest on bonds issued by MTNL in lieu of refund of Spectrum Charges/ CDMA spectrum charges and financial support on account of Minimum Alternate Tax.

IT& Telecom Minister Ravi Shankar Prasad said in Parliament, recently, that the government is working on a proper package for improvement of BSNL and MTNL.