Economy Lounge

Finance ministry is proposing to close BSNL

Sell off BSNL, MTNL, Air India, Airport Authority & others in the services sector –  Government has no business to be in hospitality. Privatise portions of Indian Railways especially coaches and stations, Government has no role here too.

I wrote the above in 2014, as part of my wish list to the (then) new Government of Mr Narendra Modi. After five years, they seem to be taking steps in this direction, recently the Finance Ministry has recommended the closure of BSNL & MTNL.

If this really happens, I welcome the move and wish Air India and others join the list. Taxpayers can’t be used repeatedly to bail out public sector firms that are currently benefiting only its employees.

I agree, BSNL served a vital need at one point and their employees did great nation-building services in the formative years of our nation – I salute them, but those were in the past.

Government-owned firms should exist only as long as the private sector is:

  1. Unable to (Naxal areas or Remote Villages)
  2. Unwilling to (Nascent industries or exploratory in nature)
  3. Unviable (think about the struggling State Power Discoms struggling due to state’s subsidy of tariff )
  4. Risky (think Nuclear)

Once the private sector steps in, then it is time for the Government to sell and cash out (or) close the business with fair compensation to the employees.

P.S.: There are discussions comparing Doordarshan (DD) and All India Radio (AIR) with BSNL & MTNL. I see DD and AIR be in a different category. They are a public body set up by an act of Parliament and not a company.

As per the definition of Prasar Bharati:
//Prasar Bharati is a statutory autonomous body established under the Prasar Bharati Act and came into existence on 23.11.1997. It is the Public Service Broadcaster of the country//

Just like in the UK, the BBC:
//The BBC (British Broadcasting Corporation) is a British public service broadcaster. Its main responsibility is to provide impartial public service broadcasting in the UK, Channel Islands and Isle of Man. BBC is a public corporation of the Department for Digital, Culture, Media & Sport.//

Whereas BSNL is a PSU company:
//Bharat Sanchar Nigam Ltd. was incorporated on 15th September 2000. It took over the business of providing of telecom services and network management from the erstwhile Central Government Departments of Telecom Services (DTS) and Telecom Operations (DTO), with effect from 1st October‘ 2000 on going concern basis. It is one of the largest & leading public sector units providing comprehensive range of telecom services in India.//

If you go their About page, the first objective they say the following, but have failed to execute it, still getting rewarded by a hand out from Government with the Taxpayer money.
// Increasing sales revenue with focus on subscriber retention & acquisition by way of strengthening sales & marketing, quality of service and customer delivery.//

Update 24/Oct/2019:

Government has decided to infuse Rs. 70,000 crore to revive BSNL & MTNL instead of closing, a move in my way that waste money, benefits the employees of BSNL/MTNL and unfair to honest taxpayers who are taking the burden.

To put this in context, this money is more than the annual budgetary allocation under MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act) for FY 2019-20, which was at Rs. 60,000 crores, twice of what Government of India spent for school education in FY 2018-19 which was Rs. 37,100 crore and amount to about Rs. 500 being paid to every citizen of India.

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