Paras concerning The Issue of Financial Viability of BSNL

 Paras concerning The Issue of Financial Viability of BSNL

Ø 2000 Sep 6,7,8 strike  Agreement with NFTE and FNTO 

para 2..it has been agreed that Government would do the following:

2.b   Ensure the financial viability of the Corporation for which purpose it will extend financial support/reimbursement for discharging obligations for any uneconomical services including such rural telephony services as are uneconomical

Ø Cabinet Draft Memo Sep 25 2000 approval sought by DOT

  Relevant Paras

Financial Viability

4.6 i BSNL would be duly compensated for discharging its obligations in regard to rula telephony or any other uneconomic service in accordance with any Govt directive for the Implementation of NTP 99

4.6.ii GOM has further decided that under no circumstances BSNL would be allowed to become non viable as this would be a potent instrument in the hands of the Govt for achieving its NTP 99 objectives

5. Financial Issues

5.1. Transfer of value of assets and liabilities

5.1.4 It is accordingly proposed to transfer the assets and liabilities to BSNL at this net provisional value of Rs 63000 cr

5.3 Financial Viability of BSNL

5.3.3 The DOT had prepared a comprehensive perspective plan for a 10 year period from 2000 to 2010 to chalk out specific plans of action on the ground to achieve NTP 99 objectives... The investment outlay required for PSUs would be approximately 2,22,000 cr.

5.3.4... the internal resources likely to be generated on the best possible assumptions would be 1,66,628 cr. This would leave sizeable gap of Rs 55 566 cr. If the costs directly attributable to corp as referred in 5.3.2 above are added, the resource gap would increase to Rs 88422 cr

5.4 Neutralization of impact of corporatization on BSNL's resource base

5.4.1 Exemption from IT liability. BSNL should be allowed the benefit of sec 80 1A. If amendment not possible GOI should reimburse BSNL such tax

5.4.2 Dividend payment

5.4.3 Reimbursement of LF

5.4.4  4 % concessional sales act as availed by DOT - approximately rs 700- 800 cr- additional amount should be reimbursed for procurement

5.4.6 Stamp duty on transfer of assets

 12.  Approvals sought

12 A (g)   BSNL would be duly compensated for discharging obligations in regard to rural telephony or any other uneconomic service in accordance with any Govt directive for implementation of NTP 99

12 A (h)  BSNL would not be allowed to become non viable as this would be a potent instrument in the hands of the Govt for achieving its social objectives of achieving NTP 99 objectives

12 B Approval of Financial Issues

12 B iii fiscal/ monetary reliefs

a. IT exemption for 5 years

b. Exemption dividend payment

c. Reimbursement of LF till 2010

d. enhanced sales tax reimbursement till 2010

e. Reimbursement of Spectrum charges for providing rual/ unprofitable/ remote areas in future

f. GOI to bear stamp duty

g. Reimburse BSNL for any non commercial activity which GOI may direct it to perform.

Ø Cabinet decisions

12 (A) (g) and (h) and       12 (B) (iii) (a) to (e) (g),(h) and (i)

 A package of measures will be provided to see that the viability of Bharat Sanchar Nigam Limited (BSNL) is not impaired because of implementation of any socially desirable but uneconomic activity such as rural telephony, undertaken at the behest of the Government. A proposal in this regard along with appropriate modifications that may become necessary in the proposals at paragraph 12 (B) (iii) (a) to (e) (g), (h) and (i) be brought up for consideration in consultation with ministry of Finance.

(Note:

1.    Kindly check the sought 12 A (g) (h) and the cabinet approval for 12 A(g) (h). Regarding 12 B issues,  bring the proposals with modifications  be brought up for consideration in consultaion with MOF. Note no assurance on 12 B issues

2.    BSNL sought concessions for implementations of NTP 99 Objectives mentioning the period 2000-2010 and spelt the expected resource gap more than 88000 crore inclusive of costs attributable on account of conversion of Corporatisation

3.    Unfortunately nobody thought of extending the demand of  concession / obligation beyond NTP 99 to NTP 2012 and to the present Digital Communication policy. Still almost all are pursuing the demand of Viability on NTP 99 basis only , may be due to its policy of converting DTO/DTS into BSNL)