Cabinet approves partial financial package for BSNL

Bharat Sanchar Nigam Ltd (BSNL) may now be able to maintain marginal profit levels for the financial year 2003-04, thanks to a partial relie...

Bharat Sanchar Nigam Ltd (BSNL) may now be able to maintain marginal profit levels for the financial year 2003-04, thanks to a partial relief from the government.

The government on Tuesday approved a financial package for BSNL including extension of reimbursement of licence fee and spectrum charges for a period of one year up to March 2004. This would result in an immediate saving of about Rs 2,500 crore on account of licence fee and spectrum charges, informed BSNL officials.

The Union Cabinet also approved an extension on moratorium of payment of principal and interest on BSNL’s loan till March 2005, adding that the rate of interest on this loan would be re-examined by the ministry of finance. This would result in a saving of around Rs 800-900 crore this financial year, said a BSNL official.

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BSNL’s net profit has hit a low of Rs 1,500 crore for the year 2002-2003, as compared to Rs 6,312 crore profit last year. There were fears that the PSU may go into loss next year in case it doesn’t get any financial assistance. It had asked for support package of Rs 18,515 crore for a period of five years.

With the marginal profit, BSNL will continue to support the policy directives of NTP’99 regarding rural telephony, said the official.

The quantum of dividend payable by BSNL has been left to be decided by the corporation’s board. Reimbursement of licence fee and spectrum charges would be extended, to start with, by a period of one year beyond March 2003, that is up to March 2004.

In the meantime, an examination would be carried out jointly by the Ministry of Finance and Ministry of Communications and IT as how to ensure that rural telephony and BSNL do not suffer.

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