Bharat Sanchar Nigam (BSNL) confirmed that it will be able to pay salaries to its employees for the month of May. The Company has tied up with the State Bank of India, taking a loan of Rs 1500 crore to meet its working capital requirements.
For the first time in its history, State-owned BSNL, had failed to pay salaries for the month of February to its 1.65 lakh staff. However, now it is going to make timely payments as the liquidity position of the Company has improved. The salary tab of almost Rs 900 crore will be met through the receivables from mobile, broadband and enterprise services.
Interestingly, 60 per cent of BSNL’s profits go into paying salaries. People will not be surprised to see more layoffs in the future.
Associations and unions blame Reliance Jio and their predatory pricing because of which the telecom industry is suffering.
BSNL has been recording increasing losses for some time now. In FY 18 it recorded a loss of Rs 8000 crore as compared to Rs 4,786 crore in the previous financial year. In FY19 it is expected to make more loses— over Rs 8000 crore!
Last month, the Government issued an approval and letter of comfort for the PSU for its loan of Rs 3500 crores to meet its working capital. The move is expected to bring relief to the Company, which is battling intense liquidity pressure.
The management of the Company is working on easing the liquidity process and has said that it will restore normalcy by the September quarter of 2019.