Bharat Sanchar Nigam Ltd (BSNL) expects to save around Rs 600 crore in wage bills following the Voluntary Retirement Scheme (VRS) opted by some 78,569 employees. The (VRS) scheme becomes effective from January 31, 2020.
Following this, the state-run telecom company is also looking at monetising its land assets worth Rs 73,000 crore in order to turn profitable.
"We are saving up to 50% or Rs 600 crore monthly on employee cost. In the two months of February and March in this fiscal, savings of nearly Rs 1,300 crore are coming to us," BSNL chairman, Pravin Kumar Purwar, told the Economic Times.
BSNL had floated the VRS scheme in October this year to bring down its massive salary burden.
Purwar told the news daily that the present employee base of 70,000 would be adequate to support the network. However, BSNL will continue to meet salary expenses of employees retiring till January 31, 2020.
A seven-member Group of Ministers (GoM) was recently constituted to fast-track and oversee the implementation of the Rs 69,000 crore revival plan for state-owned BSNL and MTNL, sources told PTI.
The high-level group will expedite smooth implementation of recent decisions taken on the revival of BSNL and MTNL that includes crucial elements like allocation of 4G spectrum and asset monetisation, official sources told the news agency.
In October this year, the government had approved a Rs 69,000 crore revival package for BSNL and MTNL that includes merging the two loss-making firms, monetising their assets and giving VRS to employees so that the combined entity turns profitable in two years.
The Union Cabinet headed by Prime Minister Narendra Modi had approved the plan to combine Mahanagar Telephone Nigam Ltd (MTNL) - which provides services in Mumbai and New Delhi - with BSNL that services the rest of the nation.
Over the last few weeks both the companies launched their Voluntary Retirement Scheme (VRS) plans. Nearly 92,700 employees of BSNL and MTNL have opted for voluntary retirement, which is expected to save about Rs 8,800 crore annually in salary bills for the debt-laden telecom companies.
The two firms will also monetise assets worth Rs 37,500 crore in the next three years.
MTNL has reported losses in nine of the past 10 years and BSNL too has been ringing in losses since 2010.