An official said employees should expect a delay in their March salaries as well even though cash flows in this particular month are higher due to billing from the enterprise business
State-run telecom company Bharat Sanchar Nigam (BSNL) did not pay salaries to nearly 1.76 lakh employees in February due to financial constraints, The Financial Express reported. This is the first time the firm has defaulted on its salary payments.
BSNL has been incurring losses for the past five years. This default could indicate stormy times ahead for the telecom firm as competition in the sector rises.
The company's employee union approached Telecom Minister Manoj Sinha asking him to release funds for employee salaries and to support BSNL financially. There have also been some cases of demonstrations by workers for the same. "A financial crisis is being faced by other operators also, but they are managing the situation by infusing huge amounts," All Unions and Associations of BSNL (AUAB) wrote to Sinha.
Nearly 55 percent of BSNL's revenue are dedicated to paying salaries, which increase by eight percent annually. However, its revenue remains stagnant.
Sources told the paper that BSNL has started disbursing wages to staff in Jammu & Kashmir, Odisha, Kerala and Delhi. "As and when the income is generated, salaries will be paid to the staff. As the government has not given any financial support, the salaries are being delayed," an official said.
The person added that employees should expect a delay in their March salaries as well even though cash flows in this particular month are higher due to billing from the enterprise business.
The company is reportedly looking to avail a loan, but the Department of Telecommunications has not approved the move yet.BSNL reported a loss of Rs 8,000 crore in FY18, significantly up from a loss of Rs 4,786 crore in FY17. Losses in FY19 are expected to rise even further.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.