BSNL, MTNL failed to use most of the govt funds
The government is likely to tighten the estimated expenditure for Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) in the next Budget, as both the state-run telecom operators have failed to utilise most of the funds estimated in the last Budget.
During financial year 2011-12, MTNL was able to use only 14.66 per cent of the Budget estimate, while BSNL reported a better performance, according to a report by the standing committee on information technology.
The government should estimate allocations for major projects only if the preliminary works for implementation have been done and clearances are in place. "The projections for the bigger projects are being made unrealistically without analysing the bottlenecks coming in the way of implementation and huge resources are being blocked, particularly when the important projects of the government are starving for funds," according to the Standing Committee report.
During 2011-12, the government had budgeted an allocation of Rs 19,881.09 crore (Rs 198.81 billion) which was later revised to to Rs 11,878.07 crore (Rs 118.78 billion). However, till February 2012, the Department of Telecom (DoT) was only being able to utilise just 41.67 per cent or Rs 4,949.22 crore (Rs 49.49 billion) as both MTNL and BSNL failed to use most of the funds set aside for them.
Both BSNL and MTNL, which are crying for more financial support from the government, might not get everything easily.
For 2012-13, the DoT have been allocated a Plan Outlay of Rs 15,231.39 crore (Rs 152.31 billion), which includes Rs 10,431.39 crore (Rs 104.31 billion) as internal and external budgetary resources (IEBR) and Rs 4,800 crore (Rs 48 billion) as gross budgetary support (GBS).
During the 11th five-year plan period, the government had estimated an allocation of Rs 101228.78 crore (Rs 1012.29 billion) (Budget Estimate), which was later reduced to Rs 75,556.45 crore (Rs 755.56 billion) (Revised Estimate) for BSNL and MTNL. AT the end of the 11th Five-year plan, the state-run telecom operators have failed to use more than 50 per cent of the Budget Estimates, with a reported utilisation of Rs 50,003.68 crore (Rs 500.04 billion), according to the Standing Committee report.
In IEBR, the government had allocated Rs 94664.78 crore (Rs 946.65 billion) (Budget Estimate), the expenditure reported to be Rs 46821.97 crore (Rs 468.22 billion) during the 11th Five-year Plan. Under GBS, the allocation was at Rs 6,564 crore (Rs 65.64 billion) (Budget Estimate) while the utilisation stood at Rs 3,181.71 crore (Rs 31.82 billion) during the five years.
The Committee, in its report, has stated that BSNL's delay in completion of the procurements and delay in completion of the various projects are among the main reasons for the under utilisation. Major delayed projects include Defence Service Network, A&N project have been cited.
Not only that there are serious problems with BSNl and MTNL, the projections for the bigger projects are being made unrealistically which blocked resources, the Standing Committee has pointed out.
Considering MTNL's current cash flow constrains, the Committee has also suggested that the government should "continuously review" its spending ensuing that funds are being used "judiciously".
BSNL, which had a revised IEBR of Rs 65,218 crore (Rs 652.18 billion) during the 11th Five-year plan, had used about 66 per cent at Rs 42947 crore (Rs 429.47 billion) during the five years. BSNL does not receive any GBS from the government.
The DoT has informed the Standing Committee that the poor utilisation was mainly because of "fiercely competitive telecom sector, delay in projects due to unavoidable circumstances (for MTNL), and delay in tender finalisation (for BSNL).