Public sector telecom firm BSNL is contemplating recruiting top talent from the private sector to its management ranks to help prop up falling profits and stand up to competition and is willing to pay the chief executive as high Rs 10 crore a year.
The proposal, which also includes paying deserving board members up to Rs 5 crore annually, was discussed at a meeting at the Department of Telecom (DoT) last week to implement recommendations of the Sam Pitroda committee on improving BSNL's performance.
There is, however, a hiccup. This is possible only if BSNL is taken out of the purview of Public Enterprises Selection Board (PESB) and Department of Public Enterprises (DPE) as the PSU doesn't have power to recruit people to higher level positions like Chief General Managers.
The DoT meeting was chaired by Telecom Secretary P J Thomas and attended by BSNL CMD Kuldeep Goyal and other senior officials.
The Pitroda panel has recommended enhancing the quality of senior executives so that the management team and the decision making process could respond to the competitive business environment and the changing market realities.
The market is currently led by private player Bharti Airtel.
Although no final decision has been taken, many see even a discussion in this direction as a welcome move.
BSNL's profits declined to as low as Rs 175 crore in the first nine months of last fiscal and is expected to register net losses for the entire 2009-10 fiscal as against profits of over Rs 10,000 crore in 2004-05.
It was pointed out at the meeting that after implementing the second pay revision, persons at Board level can earn as much as 200 per cent of their basic as bonus and other fringe benefits. This is almost Rs three lakh per month or Rs 36 lakh a year besides other perks like housing, LTC and medical.
But this is far less compared to what top executives get in the private sector.
BSNL CMD Goyal, however, pointed out that in the past the PSU itself has performed quite well, even in the face of competition from private sector companies. "What is required is freedom of action by the Board," he said.
Goyal is understood to have told the DoT that in order to act as fast as competition, the Board needs to be given the freedom to act without questioning. If the Board and Management Committee have taken a decision, then it should not be questioned.
In private sector, decisions are taken across the table without going through an elaborate tendering process, whereas in public sector even after following an elaborate process, decisions are prone to questions and scrutiny from various government agencies like CVC, CBI and CAG etc, Goyal is understood to have informed the DoT.
The DoT is also considering to separate the post of Chairman and Managing Director into two so that the Chairman is not bogged down by day to day activities and can provide a broader perspective to the organisation.
Sources said that all these and other recommendations of the Pitroda panel came up for discussion and a decision is likely soon.
