BSNL salary burden at nearly 50 percent of revenue

Salary burden of state-run telecom firm BSNL in 2011-12 increased to Rs. 13,406 crore, almost half its revenues, with as much as Rs. 5,000 crore being spent on one lakh employees who were in excess of the requirement.

The salary cost of the telecom firm was Rs. 8,809 crore in 2007-08, which accounted for around 23 percent of its revenues, Parliamentary panel has said.

BSNL revenues declined to Rs. 27,934 crore in 2011-12 from Rs. 38,053 crore in 2007-08, it said.

The Committee on Public Undertakings noted in its report "The staff cost was about Rs. 13,406 crore in 2011-12, that is almost 50 percent of its revenue, which is abnormally on the higher side as compared to private companies whose expenditure is stated to be in the range of 5-10 percent."

The Pitroda Committee had recommended the government to retire or transfer around one lakh employees through best possible processes like voluntary retirement scheme (VRS) for improving the financial performance of the company.

VRS would involve a payment of around Rs. 18,000 crore and BSNL had asked the government to arrange the funds. However, the government has not made any commitment in this regard, BSNL CMD R K Upadhyay said in a reply to the committee.

"So, the VRS itself is an issue where the government will have to take a call.in the long term interest of BSNL one has to reduce the staff and it is up to government to think over as to how to support the VRS action," Upadhyay said.

The committee noted that BSNL has not only large number of employees but skills of these employees are also not suited to present requirements. Rendering services to mobile and broadband customers of today is entirely different from providing largely landline services in the past.

"These employees were linked with the legacy landline business which required much more manpower compared to latest technology deployed by private players," the committee said.

As per BSNL, it has to bear the expenses of their pay and allowances but their productivity is low, it added.

The employee strength of BSNL was 3.97 lakh in 2000 when it was created. It had come down to 2.58 lakh as on March 31, 2012.

BSNL said during the last five years, about 841 executives of a total strength of about 56,000 have taken VRS, whereas 27 have resigned from the services.

"This comes out to be an attrition rate of about 0.32 percent, which is negligible in comparison to the attrition rate of more than 20 percent in case of private service providers," BSNL said.

BSNL's losses have increased to Rs. 8,851 crore in 2011-12 from a net profit of Rs. 3,009 crore in 2007-08.