Economy, asked by raiyanaziz13, 9 months ago

"Recently the Government of India has decided to merge MTNL and BSNL on account of rising losses." Justify the steps taken by the Government of India.

Answers

Answered by kyaman60

Answer:

In order to revive loss-making telecom PSUs BSNL and MTNL, the government today decided to merge the two ailing firms as part of a revival package that includes raising sovereign bonds, monetising assets and voluntary retirement scheme (VRS) for employees.

As part of the revival package, MTNL will be merged with BSNL. Pending this, MTNL will act as a subsidiary of BSNL. MTNL is listed but has its net worth already eroded. BSNL is unlisted.

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Answered by ruchibs1810

Answer:

Frankly the decision to merge MTNL and BSNL seems to be a positive step towards reviving the fortunes of both companies. First the merger could help in reducing losses Second improving the network. Third boosting the telecom sector and providing job security to employees.

Explanation:

The decision to merge MTNL (Mahanagar Telephone Nigam Limited) and BSNL (Bharat Sanchar Nigam Limited) was taken by the Government of India in October 2019. The primary reason behind this decision was the mounting losses incurred by both the telecom companies.

Precisely here are some justifications for the steps taken by the Government of India:

Financial Losses: MTNL and BSNL have been struggling with financial losses for several years. The merger would lead to cost optimization which could result in savings on expenses such as salaries, rentals, and administrative costs. This could help the companies to become more financially stable.

Improving the Network: The merger would bring together the strengths of both companies, which would help in improving their network infrastructure. It would result in the pooling of resources, which could lead to better coverage, faster internet speeds, and a more reliable network.

Boost to the Telecom Sector: The merger could help in boosting the telecom sector in India. The combined entity would have a larger market share, which would increase its bargaining power with vendors and suppliers. It would also lead to increased competition in the market, which could result in better services for customers.

Job Security: The merger could help in safeguarding the jobs of employees of both companies. The combined entity would be in a better position to offer job security to its employees, which could help in boosting the morale of the workforce.

"Recently the Government of India has decided to merge MTNL and BSNL on account of rising losses." Justify the steps taken by the Government of India.​

Answers

"Recently the Government of India has decided to merge MTNL and BSNL on account of rising losses." Justify the steps taken by the Government of India.