The Telecom Ministry has given its consent for the merger of the loss-making state-owned Mahanagar Telephone Nigam Ltd (MTNL) with Bharat Sanchar Nigam Ltd (BSNL). The move is a part of a revival plan approved by the ministry.
Following the merger, MTNL would be converted into a subsidiary of BSNL. The merger would be carried out after resolving issues such as human resources, the Hindu BusinessLine reported. As per a memo approved by Telecom Minister Ravi Shankar Prasad, a joint committee will be set up to monitor the whole process over the next 18 months.
Prasad had given his consent to the plan last Friday which was then circulated to other ministries for comments, the report said. However, the cabinet will take the final decision on this.
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The approved plan also comprised a Rs 14,155 crore capital infusion to BSNL by the government to acquire 4G spectrum. In addition to the capital infusion, land monetisation for meeting the company's expansion plans is also in the pipeline. This will be jointly monitored by BSNL, Department of Telecommunications (DoT) and Department of Investment and Public Asset Management (DIPAM), the report added.
A Special Purpose Vehicle (SPV) will also be constituted for taking the decisions related to land monetisation. The BSNL's loan to the tune of Rs 23,000 crore and an equivalent land parcel will be moved to this SPV.
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The report also said that a Voluntary Retirement Scheme (VRS) for employees above 50 years is in the pipeline as well following which the retirement age will be lowered to 58. The employees will be paid an ex-gratia in cash wherein a single or maximum five installments will be given to them for availing tax benefits.
MTNL, which is listed on the Indian bourses NSE and BSE, operates in two major circles - Delhi and Mumbai.
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(Edited By: Manali)