Govt plans Rs 8,500 crore VRS for MTNL, BSNL

This could be one of the biggest voluntary retirement schemes (VRS) and early pension scheme offered in the country. The government is planning a near Rs 8,500-crore support scheme for BSNL and MTNLNSE -3.96 % to reduce the large pool of their ageing manpower and infuse fresh life into these ailing telecom PSUs, which are under debt and heavy losses.

Official sources said the two PSUs — despite being seen as a burden on the exchequer — are “strategic assets” in a sector where “government presence is desirable”.

The VRS support for BSNL is estimated at Rs 6,365 crore, while for MTNL — which operates in Delhi and Mumbai circles — it is Rs 2,120 crore. The plan will be backed by a 10-year bond issue, for which large land holdings of these two PSUs can be kept as collateral, sources added.