DRAFT ON VRS.pdf (application/pdf Object)
www.bsnlnewsbyashokhindocha.blogspot.com M-09426254999
VRS IIS DANGEROUS TO BSNL AND EMPLOYEES
The BSNL Managementt supplliied a copy off iitts VRS proposall tto BSNL Emplloyees Uniion on 20..09..2011
seekiing iitts viiew on tthe proposall.. The BSNL Emplloyees Uniion as wellll as JJAC have deciided tto go on
sttrugglle agaiinstt tthe VRS,, siince iitt iis agaiinstt BSNL and emplloyees.. The ffollllowiing are tthe reasons ffor
opposiing tthe VRS..
1.. VRS iis bad iin ttheory and ffaiilled iin practtiice
VRS iis bad iin ttheory siince iitt iis iin essence notthiing butt bllamiing tthe emplloyees and tthe expendiitture
on ttheiir wages as responsiiblle ffor tthe llosses iincurred by tthe Company.. IItt iis based on tthe ffallse
presumpttiion tthatt by reduciing tthe number off emplloyees,, tthe llosses can be reduced and proffiitts
can be reviived.. 3 rounds off VRS were allready iimpllementted iin MTNL.. Butt iitt resulltted iin ffurtther
llosses tto MTNL.. Thus VRS iis bad iin ttheory and ffaiilled iin practtiice..
2.. Large scalle removall off one llakh emplloyees ffrom serviice
Siince tthe removall off a smallll number off emplloyees ffaiilled tto save MTNL ffrom llosses,, now tthe BSNL
managementt proposes tto rremove emplloyees iin llarge number.. IItts proposall aiims att removiing one
llakh emplloyees ffrom serviice,, outt off tthe exiisttiing 2,,76,,000 emplloyees.. Thiis iindiicattes a llarge scalle
attttack on tthe emplloyees..
3.. IItt iis nott VRS butt iitt iis CRS
Fiixiing tthe ttargett off removall one llakh emplloyees iin tthe name off VRS revealls tthatt iitt iis nott vollunttary
and tthe emplloyees wiillll be coerced tto ttake VRS ttiillll tthe ttargett iis reached.. Thereffore iin practtiice iitt iis
CRS..
4.. Furtther attttack iis iimplliied
The proposall aiims att handiing over tthe maiinttenance off exchanges and severall otther works tto tthe
co--operattiive sociiettiies fformed by tthose who wiillll ttake VRS.. Then whatt work tthe remaiiniing
emplloyees iin serviice wiillll have? IIn tthe nextt iinsttallllmentt tthey allso wiillll be sentt outt.. IIn ffactt tthe ttargett
iis tto reduce tthe number off emplloyees ffrom tthe presentt 2,,76,,000 tto a mere 25,,000 on par wiitth
Aiirttell were tthe number off emplloyees are 25,,000 onlly..
5.. Sttep ttowards priivattiizattiion off BSNL
As can be seen ffrom tthe poiintts giiven bellow,, tthe VRS iis haviing ffiinanciialllly negattiive iimpactt on BSNL
as wellll as on tthe emplloyees.. The aiim off such a llarge scalle VRS whiich iis ffiinanciialllly unwarrantted,, iis
onlly tto remove tthe emplloyees iin llarge scalle and make BSNL ready ffor priivattiizattiion..
6.. Fundiing off tthe VRS iis an addiittiionall burden on tthe allready lloss makiing BSNL
((a)) As per tthe para 8 off tthe DPE O..M.. No.. 2((32))/97--DPE((WC))/GL--XXIIII datted 5th May,, 2000,,
budgettary supportt wiillll be proviided tto tthe margiinalllly proffiitt or lloss makiing entterpriises and
tto tthe siick entterpriises ffor iimpllementtiing VRS onlly iin case bank crediitt iis nott avaiillablle.. The
iimmediiatte expendiitture tto be iincurred ffor VRS tto one llakh emplloyees iis shown as Rs 18181
crores.. ((ffor exgrattiia--Rs 8655 cr,, ffor pensiion commuttattiion----Rs 3474 cr,, ffor Grattuiitty----Rs 3347
cr,, ffor lleave encashmentt—Rs 2455 cr,, ffor TA ffor settttllementt att tthe pllace off choiice afftter
ttakiing VRS—Rs 250 cr)).. The BSNL’’s requestt ffor ffundiing tthe enttiire expendiitture off Rs 8655
crore on exgrattiia cannott be acceptted as per tthe above saiid DPE order and iitt has tto ttake iitt as
lloan ffrom a bank.. IItt wiillll be an addiittiionall burden on BSNL..
((b)) As per tthe DoT’’s order on tthe subjjectt,, iin case tthe expendiitture on pensiion ffor tthose rettiired
iin DoT and rettiired iin BSNL exceeds 60% off tthe ttottall amountt paiid by ((a)) BSNL and MTNL as
lliicense ffees ((b)) diiviidend paiid by BSNL and MTNL and ((c)) corporatte ttax,, exciise dutty and
serviice ttax paiid by BSNL,, tthe addiittiionall amountt over and above tthiis 60% has tto be borne by
tthe BSNL.. Giiviing VRS tto one llakh emplloyees att a ttiime and giiviing pensiion tto allll off tthem
every montth regullarrlly wiillll abnormalllly iincrease tthe pensiion expendiitture and tthe amountt
wiillll be exceediing tthe saiid 60% by tthousands off crores whiich BSNL has tto bear.. Thiis wiillll be a
heavy burden on BSNL..
Siince BSNL iis allready a lloss makiing company,, iitt wiillll nott make any sense tto remove emplloyees iin tthe
name off VRS by iimposiing such a heavy burden..
7.. The saviing on wages cllaiimed tto be ariisiing due tto tthe iimpllementtattiion off tthe VRS iis iimagiinary
and iin ffactt iitt wiillll be a lloss
As per tthe BSNL’’s proposall,, tthe iimmediiatte expendiitture ffor iimpllementtiing VRS tto one llakh
emplloyees based on Gujjaratt pattttern iis Rs 18181 crores((Rs 8655 crore ffor ex--grattiia,, Rs 3347 crores
ffor grattuiitty,, Rs 3474 crores ffor pensiion commuttattiion,, Rs 2455 crores ffor lleave encashmentt,, and
Rs 250 crores ffor TA ffor settttllementt att pllace off choiice afftter ttakiing VRS)).. Agaiinstt tthiis iimmediiatte
expendiitture off Rs 18181 crores ffor removiing one llakh emplloyees,, tthe saviings tto BSNL on ttheiir
wages afftter sendiing tthem outt are esttiimatted as Rs 35266 crores cumullattiivelly duriing tthe years
2012--13 tto 2026--27.. Butt iiff tthiis amountt off Rs 18181 crore iis deposiitted iin a bank wiitth 10% iintterestt
cumullattiivelly,, iitt wiillll become around Rs..60,,000 crores by 2026--27 and iitt iis a llott more tthan tthe saiid
saviing off Rs 35266 crores.. Thereffore tthe VRS iis a lloss makiing scheme..
IInsttead off compelllliing tthe BSNL tto iimpllementt VRS wiitth such a greatt lloss,, iitt wiillll be betttter ffor tthe
Governmentt tto compensatte BSNL ffulllly ffor tthe llosses iincurred by iitt on rurall llandlliines and otther
sociiall oblliigattiions,, so tthatt iitt wiillll become once agaiin a proffiitt makiing PSU..
8.. Emplloyee ttakiing VRS iis lloosiing much
a)) Montthlly iincome afftter vollunttary rettiirementt wiillll be ffar lless tthan tthe montthlly sallary iin case
tthe emplloyee conttiinues iin serviice unttiill compllettiion off 60 years age
As per tthe callcullattiion giiven by tthe managementt iin iitts proposall regardiing ffiinanciiall beneffiitts tto
emplloyees opttiing ffor VRS,, tthe ttottall iintterestt on ex--grattiia+pensiion per montth ffor an emplloyee
haviing 45 years age and pllaced att tthe 10th sttage iin tthe NE--7 scalle iis esttiimatted as Rs 20695/--..
Thus tthe montthlly iincome off tthiis offffiiciiall afftter ttakiing VRS wiillll be Rs 20695/-- onlly.. Butt iin case he
conttiinues iin serviice wiitthoutt ttakiing VRS,, hiis montthlly sallary wiillll be Rs 14680((basiic pay))+Rs
6923((47..2% DA))+4403((30% HRA))=26006.. Thereffore due tto VRS,, hiis montthlly iincome wiillll be
iimmediiattelly reduced by 26006--20695=Rs 5311.. Furtther,, iin case he iis iin serviice unttiill
compllettiing 60 years age,, he wiillll gett 15 annuall iincrementts,, and one or ttwo promottiions..
Thereffore hiis sallary wiillll be much more iin hiis remaiiniing serviice compared tto tthiis.. Besiides,, iiff
he rettiires on compllettiion off 60 years serviice,, hiis basiic pay wiillll iincrease by 16 or 17 iincrementts
((15 annuall iincrementts+ one or ttwo iincrementts ffor promottiion)).. IIn such case hiis pensiionary
beneffiitt wiillll be much more tthan whatt he wiillll gett due tto VRS now.. Thus tthere iis a greatt lloss tto
tthe emplloyee on accountt off tthiis VRS..
b)) IIncome Tax on exgrattiia
The amountt iin excess off Rs 5,,00,,000 iin tthe exgrattiia amountt wiillll be ttaxed @33% ratte and tthus
a consiiderablle amountt iin tthe saiid exgrattiia wiillll be llostt by tthe emplloyee..
c)) VRS iis an attttack even afftter rettiirementt
The aiim off tthiis VRS iin llarge scalle iis ffor priivattiiziing tthe BSNL.. Once BSNL iis priivattiized tthere wiillll
be no MRS scheme ffor tthe rettiired offffiiciialls and tthe priivattiized company wiillll nott ffund tthe
pensiion expendiitture.. Even tthough tthe governmentt has giiven guarantty tthatt pensiion wiillll be
paiid by iitt even iin such a ciircumsttance,, iitt cannott be belliieved.. IItt iis tto be notted tthatt governmentt
assured BSNL tto compensatte ffor tthe llosses iincurred on rurall llandlliines,, butt sttopped such
compensattiion afftter a ffew years,, viiollattiing tthe assurance.. Thereffore VRS wiillll llead tto iinsecuriitty
iin tthe matttter off pensiion..
Siince tthe scheme,, as dettaiilled above,, iis harmffull botth tto tthe BSNL and tto tthe BSNL emplloyees,, tthe
proposall has tto be wiitthdrawn..
Alltternattiive ffor makiing BSNL as a proffiitt makiing PSU
1.. The managementt and DoT have ffiixed a ttargett off iincreasiing BSNL’’s revenue on serviices by 25% iin
2011--12 compared tto tthatt off 2010--11.. The revenue on serviices iin 2010--11 was Rs 27000 crores
and iiff iincreased by 25% as ttargetted,, iitt wiillll be Rs 33750 crores ffor tthe year 2011--12.. The lliikelly
expendiitture ffor 2011--12 as esttiimatted by BSNL iin iitts submiissiion tto BRPSE iis Rs 37000 crores.. The
lloss ffor tthe year 2011--12 wiillll be Rs 3250 crores,, where as iitt was Rs 6384 crores ffor tthe year 2010--
11..
2.. The llosses tto BSNL on accountt off tthe rurall llandlliines whiich are beiing maiinttaiined as a sociiall
oblliigattiion,, iis,, Rs 10000 crore every year.. Att tthe ttiime off tthe fformattiion off tthe BSNL,, tthe
Governmentt assured tthatt iitt woulld compensatte BSNL ffulllly ffor tthe llosses iincurred by iitt on tthe
sociiall oblliigattiions lliike rurall llandlliines ettc.. IIn tthe year 2005--06 tthe BSNL was compensatted tto tthe
exttentt off Rs 8000 crores((Rs 5000 crores as ADC ffrom priivatte operattors and tthe remaiiniing Rs 3000
crore as reiimbursementt off lliicense ffees and specttrum charges.. Subsequenttlly due tto tthe pressure
ffrom tthe IIndiian and Ameriican biig corporatte operattiing iin tthe name off tthe IIndo--US CEO fforum and
tthe priivatte ttellecom operattors,, tthiis compensattiion was reduced tto Rs 2000 crore per annum wiitth
effffectt ffrom 2008 and iitt iis ttottalllly sttopped now.. Butt tthe BSNL managementt iis sttiillll ttryiing tto see tthatt
tthiis compensattiion off Rs 2000 crores iis conttiinued and so ffar iitt has nott been rejjectted by tthe
Governmentt.. IIn case tthiis compensattiion off Rs 2000 crores iis paiid,, tthen tthe lloss ffor tthe year 2011--
12 wiillll be Rs 3250 crores--2000 crores=Rs 1250 crores onlly.. Butt iiff tthe acttuall lloss off Rs 8000 tto
10000 crores iincurred by BSNL on rurall llandlliines iis ffulllly compensatted by tthe Governmentt,, BSNL
wiillll gett proffiitt iinsttead off lloss.. Siimiillarlly otther sociiall oblliigattiions beiing carriied outt by BSNL by
iincurriing llosses ((ttellegraph systtem,, maiinttaiiniing 3G serviices and BWA serviices iin economiicalllly
unviiablle ciirclles/areas ettc)) have tto be compensatted..
3.. Thereffore tthe managementt shoulld procure tthe requiired equiipmentt iin ttiime,, iimprove tthe markett
share off BSNL,, and achiieve tthe ttargetted 25% iincrease iin revenue by iimproviing iitts perfformance
allong wiitth tthe co--operattiion ffrom emplloyees and shoulld pressuriize tthe Governmentt ffor
compensattiing tthe llosses iincurred on rurall llandlliines ffulllly.. Allll tthe non--executtiives and executtiives iin
BSNL mustt uniittedlly ffiightt and pressuriize tthe Governmentt so tthatt iitt compensattes ffulllly ffor tthe
llosses iincurred by tthe BSNL on sociiall oblliigattiions..
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