MTNL to save crores through voluntary retirement scheme

This rescue plan may save Rs 1,080 crore in annual wages.


The voluntary retirement scheme (VRS) being proposed by the telecom department may end up saving about Rs 1,080 crore in expenses, which would have otherwise gone into paying salaries, for Mahanagar Telephone Nigam Ltd (MTNL).

The telecom company is expecting over 9000 members of its staff to opt for the scheme if it is offered. The VRS is being offered as part of the strategy to bail out both MTNL and Bharat Sanchar Nigam (BSNL) that are currently in a distressed state.

It is reported that if 50 per cent of the staff goes in for VRS, the annual salary expenditure may be cut down by Rs 1,080 crore. Presently, almost Rs 2500 crore goes into paying the salaries of employees.

There are no lay-offs in the offing, and VRS, too, will be entirely up to the employees to take or not to take. However, the scheme is expected to attract those employees who are about to retire in the next three to four years.

Both MTNL and BSNL had been demanding a VRS which would offer an amount equivalent to 35 days of salary for each completed year of service, and 25 days of salary for each year of service remaining till retirement.

The impact on revenue as a result of the VRS scheme will be worth Rs 6,365 crore for BSNL and about Rs 2,120 crore for MTNL, and the two will receive the liquidity they require urgently.

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