Aug 12, 2011, 04.44 PM | Source: PTI
The government today said MTNL has asked for full financial support for offering voluntary retirement scheme (VRS) to its employees.
"The expected outgo of fund for supporting VRS of about 19,000 employees will be Rs 3,610 crore," Minister of State for IT & Communications Milind Deora said in a written reply to the Rajya Sabha.
MTNL has submitted a proposal, duly approved by its board seeking 100% financial support from the government for bringing out cadre-specific VRS for MTNL employees, he added.
The proposed VRS package includes compensation equivalent to 60 days salary (Basic Pay + DA) for each completed year of service or salary (Basic Pay + DA) for remaining period of service whichever is less subject to over all ceiling of 60 months salary.
MTNL has been requested to explore the possibility of raising funds from banks/ market and submit its specific request for government guarantee or letter of credit etc, keeping in view the Department of Public Enterprises (DPE) guidelines, Deora said.
As per fiscal year 2009-10, the company's manpower stood at 44,910 employees.
Recently, MTNL reported loss to Rs 850 crore for the first quarter ended June 30, 2011, mainly on account of expenditure on staff cost and retirement benefits.
The company had a loss of Rs 451.4 crore in the April-June quarter last year.
Total income declined to Rs 843 crore during the quarter under review, against Rs 971.5 crore in the same period last fiscal.
During the quarter, the company had actual payout on staff cost for retirement benefit at Rs 108 crore, up 60.71% from Rs 67 crore in the year-ago period.
The company had made a total expenditure of Rs 1,175.5 crore during the first quarter, up nearly 6% in the same quarter last year.