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BSNL fails to pay salaries for the first time; 1.76 lakh employees affected

BSNL fails to pay February salaries to 1.76 lakh employees. The fully government-owned corporation is undergoing a major cash crunch due to the price war with private companies.

BusinessToday.In | New Delhi, Wednesday, March 13, 2019 | 13:51 IST

State-owned telecom firm Bharat Sanchar Nigam Limited (BSNL) has failed to pay the February salaries to around 1.76 lakh employees due to its financial crisis. This is the first time the company has defaulted in payment of its monthly salaries. The fully government-owned corporation is undergoing a major cash crunch due to the price war with private companies. The salary for the month of February has been delayed by 10 days.

The company usually pays its employees on the last working day of the month or the first working day of the next. While BSNL continues its enviable market share, such a crisis has befallen the operator for the first time. While telecom prices have been reduced drastically, mostly after the entry of Reliance Jio, BSNL continues to operate with its large staff as compared to lean numbers employed by rivals.

According to a report in Times of India, salary due for a circle the size of Maharashtra runs up to more than Rs 60 crore. With at least 20 circles in the country, BSNL's salary bill per month is estimated to be around Rs 1,200 crore. According to reports around 55% of BSNL's revenues go in footing the monthly wages. The wage bill continues to increase annually by 8% but the revenues are stagnant.

The employees' union, All Unions and Associations of BSNL (AUAB), has written to telecom minister Manoj Sinha asking the government to release funds so that the salaries can be paid and the firm revived. "Financial crisis is being faced by other operators also but they are managing the situation by infusing huge amounts," mentioned the letter.

A BSNL official told Financial Express that the company has started paying the February salaries to staff in Kerala, J&K, Odisha and the corporate office. The official added that the March salaries are also likely to be delayed by a few days.

(Edited by Anwesha Madhukalya)

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