BSNL to Sack 54,000 Employees: Report

The board of directors of state telecom operator Bharat Sanchar Nigam (BSNL) Limited has approved the proposal to lay off more than 54,000 employees. The final call on the issue is expected to be made after the Lok Sabha elections are over in 2019.

The BSNL board approved three of the ten suggestions submitted by a panel of government experts, the Deccan Herald reported. Approved suggestions include the reduction in the retirement age from the 60 years to 58 years, voluntary retirement scheme and the fast-tracking assignment of the 4G spectrums to BSNL, the daily reported.

The panel of experts, who recommended the steps approved by the BSNL board, was formed in the face of increasing losses in the telecom company. The three-member panel consists of Professors Rekha Jain, Vishal Gupta and Ajay Pandey of the Indian Institute of Ahmedabad (IIM-A).

The decision to reduce the retirement age and announce the VRS package will see around 54,451 BSNL employees exiting the government's telecom company, according to the report. This constitutes about 31 per cent of the BSNL workforce of 1.74 lakh.

The measure is expected to help the state telecommunications company save Rs 13,895 crore on the salary bill for the next six years, while VRS could help save Rs 1,671 crore to Rs 1,921.24 crore each year, according to the report. The decision to announce a VRS package could help the besieged telecom operator save up to 1,921 crores per year, according to the report, but at a cost of 13,000 crores.

On the other hand, it is likely that the Department of Telecommunications (DoT) will wait until the Lok Sabha elections are completed in 2019 before moving forward with proposals related to retirement age and VRS. The DoT has decided to wait, since the announcement of VRS packages or layoffs and the closure of businesses of the telecom firm could now have a significant influence on employees and elections, according to the report.

In addition, reports suggest that the DoT will approach the Indian Electoral Commission seeking approval of its Cabinet proposal to offer VRS to employees of BSNL and MTNL. The telecom ministry has to seek approval from ECI before going to the Cabinet since the Model Code of Conduct is in effect in view of the 2019 elections in Lok Sabha. Apparently, the DoT is preparing a Cabinet note for its VRS package.

BSNL has been recording losses since the entry of Reliance Jio into the Indian telecom market and the tariff war that followed. Last month, the company did not pay its employees for the first time since it began operations. Full salaries were disbursed later after the government released the pending fees.

Meanwhile, the reports suggested that the DoT could implement the recommendations under the Seventh Pay Commission for BSNL sometime in April 2019. The department has already sent the salary and pension hike demands raised by the BSNL employee union. AUAB to the Ministry of Finance.