Macro Moves

What is the new BSNL VRS Scheme about?

Created on 13 Nov 2019

Wraps up in 3 Min

Read by 4.3k people

Updated on 10 Sep 2022

Employees quitting BSNL and migrating to VRS

More than 60,000 employees of BSNL & MTNL have applied for VRS in just 4 days! What’s special about this VRS and what is BSNL expecting out of this?

Bharat Sanchar Nigam Limited (BSNL) is reducing its staff strength to half! Now this might sound drastic, but it’s true. No, they are not issuing pink slips to their employees for cutting down costs. The employees are opting for Voluntary Retirement Scheme (VRS) that had been rolled out by the government a few days ago.

What’s so special about this Voluntary Retirement Scheme (VRS)? This is a logical question because more than 60,000 employees have applied for the VRS in just 4 days! Just in case you ever thought that BSNL employees are not pro-active, have a look at this recent happening. Although, it would be better if such activeness is shown in their customer support as well.

What’s Expected Out of this VRS?

Such a huge scheme surely can’t be rolled out without a purpose. So, here’s what BSNL expects with this:

If somewhere between 70,000 – 80,000 employees opt for this scheme, BSNL might save around Rs. 7000 crores in wage bill! That would be huge saving, right? Coming to the demographic effect of this scheme. The total staff strength of BSNL is around 1.5 Lakhs and the total number of staff eligible to take VRS is around 1 Lakh. However, the internal target of BSNL has been pegged at 77000.

Just think about this. Currently, more than 66% of BSNL’s staff is aged more than 50 years! Strategically speaking age is sometimes an advantage as well. But, in BSNL’s case it’s quite evidently a disadvantage.

What are the benefits of VRS & Eligibility Criteria?

All regular and permanent employees of BSNL including those on deputation to other organizations are posted outside BSNL on deputation basis, which attained the age of 50 years or above are eligible to seek voluntary retirement under the scheme.

This Voluntary Retirement Scheme was rolled out by the government on 5 November i.e. post its announcement of BSNL-MTNL merger a few days back. The scheme is open till December 3 and the date by which the voluntary retirement will take effect is January 31, 2020.

The scheme is attractively designed per se, as employees aged above 53.5 years will receive 125% of their potential remuneration (amount they could have earned if they had continued serving), those aged between 50 and 53.5 years will receive between 80-100% of remuneration while those above 55 years will receive the amount only when they attain the age of 60 years (which is current retirement age).

Govt’s Pockets Getting Lighter

The government approved a revival package of Rs. 69,000 crores for BSNL and MTNL. This amount includes giving VRS to their employees and monetizing their assets. This is also the need of the hour since both, BSNL and MTNL have reported continuous losses since last 9 years. As a matter of fact, the total debt on both these firms stands at whopping Rs. 40,000 crores!

In present circumstances, when government is planning to privatize loss making government entities, it has experimented a merger with BSNL. But, ultimately how this move turns out for the government and BSNL itself, we’ll have to wait and watch.

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Ayushi Upadhyay

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A Keen Learner. Tiny, brainy, and studious, this quiet one stays in her zone until she pops. And once she does, boy, are her comebacks snappy! There is no financial question that she can't answer through her magical blog-writing. 

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