In the largest mass retirement of employees in the country, nearly 93,000 staffers of state-run Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) have opted for the voluntary retirement scheme (VRS) offered by the central government.
The move, which comes as part of a government scheme to restructure the loss-laden companies, will substantially reduce the wage bills of these utilities and free up real estate that has a potential for monetisation in the future.
Significantly, of the 1,53,000 employees working for BSNL when the VRS scheme was approved in October 2019, over half — 78,569 employees in all — have opted to retire.
At MTNL, which had an employee strength of over 18,000, nearly 80 per cent — 14,400 employees — have opted for the VRS.
Most of the employees of BSNL who have opted for the VRS are learnt to be in the non-executive category and in the age group of 55-60 years, officials said.
“About 93,000 people have opted for VRS. What is significant is there is not a single court case. BSNL’s wage bill will reduce by about 50 per cent, while MTNL wage expenses will come down by about 75 per cent after the process is completed. Their annual expenditure on employees, which was about Rs 1,300 crore, will come down to Rs 650 crore,” a senior Department of Telecommunications (DoT) official told The Indian Express.
The move has also freed up a lot of real estate space, which both BSNL and MTNL have already started monetising. BSNL, the bigger of the two telcos, has targeted revenues of around Rs 300 crore this financial year by selling its land parcels to the Central Board of Secondary Education and the Irrigation Department in places like Thiruvananthapuram and Bhopal.
MTNL, on the other hand, is in talks with the Income Tax department to lease its building space in various places, DoT officials said.
It has also started leasing out its building in New Delhi. One of the floors in the MTNL building in Central Delhi has been occupied by the National Company Law Appellate Tribunal since mid-January.
“Other than land parcels and building assets, we have identified other assets worth Rs 20,000 crore that could be done away with. BSNL has already approached DIPAM (Department of Investment and Public Asset Management) through us for clearances on these assets. It should be done in due course,” an official said.
For the employees at both the state-run telecom companies, the VRS was opened for a month starting November 4. The last date for employees who had opted for the VRS at both the telcos was January 31. Any employee, aged 50 or above, at both these state-run firms was eligible to opt for the scheme.
The lump sum compensation or ex-gratia payment to be given to employees of BSNL and MTNL has been fixed at 35 days of salary for each year in service and 25 days of salary for each year left until retirement. The first instalment of the compensation, which would be 50 per cent of the total payment, would be paid this financial year while the second instalment is likely to be disbursed in the next financial year starting April, DoT officials said. To meet the VRS payment obligations as well as for capital infusion to revive the company, the government has allotted Rs 37,268 crore in the budget for 2020-21.
In the VRS offer papers, reviewed by The Indian Express, one clause states that in case an employee dies after submitting the VRS application but before the effective date of voluntary retirement (January 31), “the amount of ex-gratia payment shall not be released to the family or legal heirs of deceased employee”.
Both BSNL and MTNL have faced some resistance from their employees in implementing the VRS. Owing to the cash crunch at both the organisations, the salaries for December and January have not been paid, which has led to flash strikes at regional centres, a DoT official said, adding that it would be resolved as soon as the final document clearances of the people who have opted for VRS is completed.
The VRS was approved by the Central government in October last year as a part of the restructuring and revival plan of the company. In the Cabinet meeting held on October 23, allotment of spectrum for 4G services, monetisation of land, building, and tower assets of BSNL-MTNL, as well as a debt-restructuring scheme was also given the nod.―Indian Express