The government had rejected Rs 74,000 crore bailout package for BSNL and MTNL

Finance ministry suggests shutting down BSNL and MTNL

The finance ministry has suggested that ailing public sector undertakings Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) be shut down. The development comes after the finance ministry rejected the proposal of the department of telecommunications (DoT) to pump in a massive Rs 74,000 crore to revive the ailing PSUs. The cost of closure won’t be as high as Rs 95,000 crore as argued by the DoT earlier.

There are three categories of staff at the two public sector units–those directly recruited, staff who were transferred from other PSUs or government departments and absorbed, and the officers of the Indian Telecommunications Service (ITS). If the classification was done along these lines, the cost of closure might be lower than Rs 95,000 crore, the report said.

This is because ITS officers can be redeployed to other government departments and needn’t be given VRS. Further, direct recruits involve most junior staff, whose salary is not very high, and make up only 10 percent of the total workforce.

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BSNL and MTNL have been asked to identify staff strength under each category to help calculate the full cost of closing the two companies, sources told the newspaper.