Central Govt Against Any Proposed Merger Of Vodafone Idea With BSNL/MTNL: Report

The central government is reportedly opposed to the idea of merging ailing telecom company Vodafone-Idea with the state-owned BSNL and MTNL.

This is despite Kumar Mangalam Birla’s proposal for the government to take over 27 per cent stake in the telco in the wake of ‘national interest’.

Sources from the government claim that several logical reasons support the outright rejection of any proposition that recommends taking any loss-making private entity under the fold of any state-owned firm.

“How can we even allow this. It’s almost like having privatisation of profits, and nationalisation of losses?,” one of the senior officials from the government was quoted in a report by The Times of India (TOI).

In fact, the concerned state-owned companies themselves have a poor record with regards to managing their businesses and are thus reliant on bailouts from the government to sustain their operations.

Another officer explained that merging struggling entities could result in a greater financial drain on the exchequer in the future considering that there is no turnaround in operations as such.

Furthermore, the NITI Aayog is against this idea as well as it believes that any such move will further erode Vodafone Idea’s value and hence BSNL/MTNL might not have much to gain from the deal either.

“In any case, instead of being so considerate for an inefficient private entity, the government may simply focus more on the BSNL/MTNL combine and give them more funds to make them competitive and turn them around,” the officer was quoted by the publication.