BSNL to get Rs 1,250 cr subsidy for rural connections

IN A big respite to ailing state-run telecom operator BSNL, the Cabinet on September 21 cleared the long-pending compensation of Rs. 1,250 crore for public sector telecom company BSNL to support rural landline connections installed before April 1, 2002. "The Cabinet approves subsidy of Rs. 1,250 crore to BSNL as compensation for deficit incurred by BSNL in operating rural wire-line connections," said Frank Noronha, the government's Principal Spokesperson, on Twitter. The BSNL subsidy...
support will be given from the Universal Service Obligation Fund for the rural connections installed prior to 1 April, 2002, he said. The telecom firm has asked the government to provide Rs. 2,000 crore to support rural wireline connections.
On the basis of the submission of BSNL and the detailed information in respect of working rural wire-line connections installed before April 1, 2002, the deficit per rural wire-line connection was estimated at Rs. 4,876 for 2011-12. The deficit from the rural wire-line connections installed before April 1, 2002 for 2011-12 and 2012-13 were estimated at Rs. 1,593 crore and Rs. 1,265 crore respectively. The Department of Telecom had paid subsidy for these connections to BSNL up to July 17, 2011. Based on the trend at that point, regulator TRAI estimated subsidy of Rs. 1,500 crore for 2011-12 with effect from July 17, 2011 and Rs. 1,250 crore for the subsequent year effective July 18, 2012. BSNL has received Rs. 1,500 crore subsidy and the Cabinet approved the pending amount of Rs. 1,250 crore.
Earlier, Union Cabinet on July 5 approved pension revision to the retirees of public sector telecom company Bharat Sanchar Nigam Limited (BSNL) by allowing the benefit of merger of 50 per cent DA/DR with basic pay.
The pension revision for BSNL pensioners and family pensioners will amount to 78.2 per cent DA/DR for the purpose of fitment and modifying BSNL's liability towards pensioner benefits payments to retired employees.
This revision will fulfil the long pending demand of revision of pension of BSNL absorbed employees who retired prior to June 10, 2013 and will bring the pensioners at par with the serving employees of BSNL by removing the anomalies.
BSNL chairman and managing director (CMD) Anupam Shrivastava recently sending a strong message to its employees that there won’t be any revision in salary next year unless the company turns profitable.
BSNL has earned an operating profit of Rs 672 crore till June this year for the first time in seven years. BSNL was incurring Rs 8,000 crore loss in 2014. But, today it has earned an operating profit of Rs 672 crore in just one and half year’s time.