Telecom Commission okay Rs 1500 cr subsidy for BSNL

The Telecom Commission today approved a subsidy of Rs 1500 crore for the public sector telecom major BSNL. The subsidy will be given to BSNL for expanding telephony in rural areas, reports Malvika Jain of CNBC-TV18.

The subsidy will be paid out of the Universal Service Obligation (USO) Fund so it will have no impact on the fiscal deficit, but it will definitely impact the profits of Bharat Sanchar Nigam Limited (BSNL) and lower down the losses which the company has been incurring.

Earlier, the Telecom Regulatory Authority of India (TRAI) had recommended that Rs 2,700 crore should be given to BSNL because they operate in remote and rural telecom circles where they are unable to make substantial profits and now in view of that this decision has been taken.

TRAI had recommended that it should be divided into two installments, the subsidy outgo of Rs 1,500 crore for 2011-12 and for 2012-13 Rs 1,250 crore should be given to BSNL. The first set of this payment has now been approved by the Telecom Commission. This decision will now be ratified by the cabinet, it is only then that the subsidy is going to be given to BSNL.