Millennium Post

MTNL’s golden handshake

It is unforunate that state-owned MTNL has decided to switch to the policy of a voluntary retirement scheme which it has offered to about 20,000 employees. This is a large number of employees and the VRS thus constitutes the implementation of an unstated and unofficial retrenchment scheme. There have to be good reasons for a public sector corporation to offer the golden handshake to so many of its employees. None are apparent on the face of it and this may not the right way for it to attempt to solve its problems which stem from larger and more systemic causes. It is undoubtedly true that MTNL, which  was once at the forefront of the telecommunications revolution and the growth story revolving around phones, has fallen back and is in the doldrums. There are many reasons for this decline in the performance of this navratna and employee numbers or performance is not necessarily one of them.

Among the easily identifiable reasons for the declining performance of MTNL is that it has been restricted to just the metros of Delhi and Mumbai which has not allowed investment in new technologies which requires a larger mass of consumers to support it. This is a restriction not faced by many of the private players who have all India resources to draw upon. Indeed, the government is aware of this limitation of MTNL and has recently suggested synergies with BSNL to help overcome
some of the gaps.

There are many other reasons for the falling performance of MTNL some of which it shares with other public sector units. One of them is excessive political and government interference. This is a probable explanation of why this decision on VRS has been taken now perhaps to help private companies. An analysis of the workings of MTNL will surely bring to light the various other inefficiencies and causes that may be contributing to its sluggish performance and also suggest the methods by which this can be improved.

MTNL has instead  taken a shortcut. It has fallen into the trap of offering its employees an exit policy in a quest to become more profitable and competitive. It has chosen the management strategy of a globalised economy  which emphasisies getting rid of excess manpower in order to supposedly improve its performance so that it can meet the increased competition from private players. It has forgotten that one of the socialist objectives of setting up public sector units was to provide employment. Surely it is not the intention of the government, or MTNL, to go about bringing in jobless growth in the country or to create fear and uncertainty among the employees. It is therefore for MTNL to re-consider the voluntary retirement scheme.
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