Union Cabinet on Wednesday approved revival plan of BSNL (Bharat Sanchar Nigam Limited) and MTNL (Mahanagar Telephone Nigam Limited) and in-principle merger of the two.
The Cabinet, headed by Prime Minister Narendra Modi, also announced revival plan for both the telcos. The government announced four steps to revive BSNL and MTNL. Telecom Minister Ravi Shankar Prasad said that the government wants to make these companies more competitive.
Union Minister Ravi Shankar Prasad said, "Neither MTNL or BSNL are being closed, nor being disinvested, nor is being hired to any third party."
Prasad said that the government also plans to raise a sovereign bond of Rs 15,000 crore for revival of BSNL and MTNL. He further announced that the government will offer an attractive VRS package for employees in both the companies.
Giving an example of the VRS package, Prasad said any employee above the age of 53 and a half, who opts for the VRS, will be given 125% remuneration of the salary, pension and gratuity till the age of 60.
Briefing reporters on decisions taken by the Cabinet headed by Prime Minister Narendra Modi, Telecom Minister Ravi Shankar Prasad said the government will put in Rs 29,937 crore for revival of the two state-owned telecom companies.
The revival package includes raising of Rs 15,000 crore sovereign bonds and monetising Rs 38,000 crore of assets in the next four years.
Also, voluntary retirement will be offered to employees to cut cost. BSNL and MTNL will be merged. Pending this, MTNL will act as a subsidiary of BSNL.