19,000 BSNL Employees may be provided VRS by Government, DOT seeks approval from Finance Ministry

The Department of Telecommunications (DoT) is set to approach the finance ministry for approval of a second voluntary retirement scheme (VRS) for Bharat Sanchar Nigam Limited (BSNL). This initiative aims to reduce the state-owned telecom company’s workforce by 35% to improve its financial health, according to a report by The Economic Times (ET).
Workforce Reduction and Financial Goals
BSNL is seeking Rs 15,000 crore from the finance ministry to fund the proposed VRS. The company’s board has recommended cutting its employee base by 18,000 to 19,000 through the scheme. This reduction is expected to enhance BSNL’s balance sheet and help the company focus on more sustainable operations.
Currently, BSNL spends approximately Rs 7,500 crore annually on employee salaries, which accounts for about 38% of its revenue. With the proposed workforce reduction, the company aims to bring this expenditure down to Rs 5,000 crore annually.
Approval Process
Once the finance ministry gives its approval, the communications ministry will seek the Cabinet’s nod to implement the scheme. The BSNL board approved the VRS proposal earlier this week as part of its efforts to streamline the company’s operations and reduce costs, particularly in the absence of nationwide 4G services. However, a senior BSNL official noted that the plan is still under internal discussion, and no final decision has been made.
BSNL’s Current Financial Position
BSNL reported revenue of Rs 21,302 crore for the fiscal year 2023-24 (FY24), showing a slight improvement over the previous year. The company’s workforce consists of over 30,000 non-executive employees and 25,000 executives.
Previous Revival Plans and VRS
This is not the first time the government has implemented a VRS for BSNL. In 2019, as part of a Rs 69,000-crore revival package for BSNL and Mahanagar Telephone Nigam Limited (MTNL), 93,000 employees opted for early retirement. The ex-gratia cost of the VRS was approximately Rs 17,500 crore, covering pension, gratuity, and commutation expenses.
Since then, the government has announced two additional revival packages for BSNL and MTNL:
- 2022 Revival Package (Rs 1.64 Lakh Crore): This included financial support for de-stressing the balance sheets, funding capital expenditures, settling adjusted gross revenue (AGR) dues, and providing viability gap funding (VGF) for rural landline services.
- 2023 Revival Package (Rs 89,000 Crore): Focused on 4G and 5G spectrum allocation, the package aimed to enhance commercial data services, fixed wireless access (FWA), and private network capabilities.
Challenges Ahead
Despite these revival efforts, BSNL is yet to launch its nationwide 4G services, which remains a significant hurdle in its competitiveness against private telecom operators. Additionally, the company’s partnership with MTNL—limited to Delhi and Mumbai—adds further challenges, as MTNL relies heavily on BSNL for its mobile network infrastructure.
The government’s renewed push for a second VRS is seen as a critical step in reducing operational costs and repositioning BSNL for long-term sustainability.