The State controlled telecom service provider BSNL & MTNL to face cost cutting for revival. Revival to take place by reducing employee costs, administrative allotment of spectrum for 4G services, debt restructuring by raising of sovereign guarantee bonds, monetisation of assets and in-principle approval for merger of BSNL and MTNL. The Union Cabinet in its meeting held on 23.10.2019 considered and approved the proposals of DoT for “Revival of BSNL and MTNL” vide its Cabinet Note dated 22.10.2019.
The Cabinet has approved reduction in the employee cost by immediately offering VRS to employees of age 50 years and above. The ex-gratia amount is limited so that the total of ex-gratia amount and admissible pension for the remaining period of service does not exceed 125 % of the salary that the employee would have drawn on the date of voluntary retirement in the remaining period of the service. The ex-gratia on VRS is to be paid in two instalments of 50% each during FY 2019- 20 and during Q1 of FY 2020-21.
For the employees currently more than 55 years of age, on opting for VRS, the pension will be commuted only when they attain 60 years of age (current retirement age). For the employees, currently of age 55 years and less, opting for VRS, the pension will be commuted in the sixth year i.e. 2024-25.
Similarly, payment of Gratuity is postponed in the same manner. However, in case of death of the VRS optee before the date on which gratuity is to be paid, the deferred retirement gratuity will be released immediately to the eligible claimants. Simple interest at the prevailing GPF rates from the date of voluntary retirement till the gratuity is released, will be paid on the deferred gratuity amount.
The employee cost of BSNL is 75.06 per cent and that of MTNL is 87.15 per cent of their total income, whereas for private telecom companies , the same varies between 2.9 per cent to 5 per cent.
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