As a breather to Mahanagar Telephone Nigam limited (MTNl), Cabinet on Thursday approved the pension proposal worth Rs 500 crore every year for the company’s 43,000 employees, who joined it from DoT. After the approval, MTNl is expected to receive about Rs 1,500 crore as refund from the Government against the pension it already has paid.
The burden of employee pension payments has already dented the company’s balance sheet as it posted a net loss of Rs 5,321.12 crore in the last financial year and a combined loss of Rs 4,189.17 crore in the last three quarters of FY14. As per MTNl’s Q3 financial results, total income from operations stood at Rs 831.45 crore while its total expenses were nearly double at Rs 1,547.17 crore. 53 per cent of the company’s total expenses that is Rs 820.13 crore was spent on employee benefits. With a onetime refund of Rs 1,500 crore from the Govt, company’s balance sheet is sure to improve drastically.
In its official statement, Cabinet said, “Erstwhile all categories of employees of the Govt absorbed in MTNl and who have opted for combined service may be given similar treatment in the matter of payment of pensionary benefits as available to the absorbed employees of BSNl.”