Rs 700 cr pensions burden on BSNL

With every phone that Bharat Sanchar Nigam Ltd connects costing it around Rs 3,000, a Rs 700 crore could mean 23 lakh new telephone lines that could face the axe if the Finance Ministry demand has to be met.

What is surprising is that not only is the Bharat Sanchar Nigam Ltd expected to pick up the pension tab for employees retiring since Bharat Sanchar Nigam Ltd became a corporation in 2000 but also for all the employees who have retired from government service in the past too.

The move has sent the PSU into a tizzy which has now asked Communications Minister Pramod Mahajan to step in and take up the issue with the Finance Minister Yashwant Sinha.

‘‘This a completely illogical step by the Finance Ministry. While it is the duty of a PSU to bear the cost of retirement benefits and pension schemes for its own employees, the Finance Ministry cannot put on us the burden of paying pensions to all employees who have retired over the last couple of decades,’’ says a senior BSNL official.

‘‘It is completely unfair of the Finance Ministry to impose such a burden on a newly created PSU which is still trying to come to grips with its finances and has tremendous pressure to face competition in the market.

What is also unfair is that if the Finance Ministry does want to transfer this burden to the PSUs, it should at least have distributed the burden between the other PSUs in the sector like Mahanagar Telephone Nigam Ltd (MTNL) too,’’ an official states.

The way the Finance Ministry plans to work this pension scheme is that while the pensions would be paid by the government as it is currently done, but the funds for telecom employees would be provided for by Bharat Sanchar Nigam Ltd.

Bharat Sanchar Nigam Ltd was carved out of the erstwhile Department of Telecommunications in October 2000 in order to separate the operations part of the department running telecommunications services from the administrative and licensing wing (essentially the Communications Ministry).

The move was also expected to make the operations wing independent to make its own decision in the market place with a lesser lead time to help it compete with private telecom companies.

The current move by the Finance Ministry would put a considerable financial burden on the organisation, reducing funds for fresh investments require to provide new services and carry on its network expansion work.