BSNL Employees Could Again Face Delay in Salary Reimbursement for August Month

Bharat Sanchar Nigam Limited (BSNL) might again face the backlash of its employees as a new update from a source has revealed that the state-led telecom operator might defer the salary of its employees by a week for the August month. To recall, BSNL has delayed the salaries of its employees for the July month as well, and the same can repeat for August too, thus affecting 163,000 BSNL employees. This new update from a person familiar to the matter and was reported by ET Telecom. The delay of the salaries of BSNL employees had caused an outrage amongst the employees, especially ticking of the members of the union.

Approximately 1,63,000 Employees to be Affected by Salary Delay

A source aware of the matter said, “Cash crunch has cropped up again, and the amount required to pay BSNL’s staff remuneration is not yet transferred for disbursal. The transaction is expected in the next few days.” Usually, the salary of BSNL employees gets credited on the last working day of every month. It is also worth noting that this would be the third time this year that BSNL would be delaying the salaries of its employees. The state-led telecom operator boasts of 1,63,902 employees, which includes 46,597 executives. It is well known in the industry right now that the state-led telecom operator has been under heavy losses since the last few years.

The Department of Telecommunications (DoT) has also shed off the responsibility from providing any capital support to the company and the reimbursement from the Universal Service Obligation (USO) Fund has also been suspended for the telco. In such a scenario, the telecom operator is now raising capital from its internal accruals. What’s notable is that USOF is Rs 50,000 crore strong government reserve which was set up to fund rural telecom connectivity initiatives in the country and being the government led telecom operator, BSNL remains one of its major partners to implement new projects.

Major Chunk of BSNL Revenue Going Away in Paying Salaries

The major problem of BSNL is that a very significant chunk of its revenue goes towards paying the salaries of its employees. The revenue to wage ratio for BSNL currently stands at 75.5%, which means that the telecom operator requires Rs 800 crore per month only to pay salaries to its employees. Now, even though BSNL has received a ‘Letter of Comfort’ from the government this year in March, it has not yet received the Rs 3,300 crore worth of credit.

Several companies like Finnish Nokia, Delhi-based Paramount Wires and Cables Limited (PWCL) and Noida-based Clixxo Broadband have sought government intervention citing the risk of business continuity as their payments have been pending from BSNL. Other small firms have also filed complaints against the telecom operator on non-payment of dues. In total, the telecom operator owes somewhere near Rs 2,500 crore to its vendor partners. Currently, BSNL is also looking forward to a revival package from the government which is majorly composed of a Voluntary Retirement Scheme (VRS) and monetisation of BSNL’s real estate, tower and fibre assets.