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The finance ministry has finalized a plan to generate INR 16,000 crore by selling assets of MTNL and BSNL. The proposal, cleared by the National Land Monetization Corporation (NLMC) and the Department of Public Enterprises, awaits final approval from the Department of Investment and Public Asset Monetisation. Proceeds will aid the revival of both telecom firms, which collectively own over 600 land parcels in major cities. This move aligns with Asset Monetisation 2.0, targeting INR 10 lakh crore. With MTNL's financial distress and merger with BSNL, the success of this initiative is crucial for the telecom sector and government disinvestment plans.
The finance ministry has finalised a plan to generate INR 16,000 crore by selling assets owned by state-run telecom companies, Mahanagar Telephone Nigam Ltd (MTNL) and Bharat Sanchar Nigam Ltd (BSNL). This proposal has already received clearance from the National Land Monetization Corporation (NLMC) and the Department of Public Enterprises. It is now awaiting final approval from the Department of Investment and Public Asset Monetisation. Advertisement
According to a report by ET Realty, the panel granted waivers on fees and service charges from the Delhi Development Authority (DDA) and the Maharashtra Housing and Area Development Authority (MHADA), removing key obstacles in executing the asset sale.
The NLMC had faced delays in the monetisation process due to the absence of a full-time CEO. However, the government recently appointed Vikas Anand, a 2002 batch Uttarakhand cadre Indian Administrative Service (IAS) officer, as the corporation's new CEO, which is expected to accelerate the process. The proceeds from the asset sale will be used to strengthen MTNL and BSNL. Currently, both telecom firms own over 600 land parcels and buildings across India, including valuable properties in Mumbai, Delhi, and Chennai.
The asset monetisation drive aligns with Finance Minister Nirmala Sitharaman's announcement of Asset Monetisation 2.0, which aims to generate INR 10 lakh crore by unlocking the value of government-owned assets and reinvesting the funds into new infrastructure projects. The Centre has set a target of INR 47,000 crore through disinvestment and asset monetisation for 2025-26.
MTNL has been struggling financially. In November last year, it defaulted on a payment of INR 5,726.29 crore, which included a principal of INR 5,492 crore borrowed from multiple banks and INR 234.28 crore in interest. At that time, the company revealed in a regulatory filing that its total financial debt had reached INR 32,097.28 crore-40 times its consolidated annual income of INR 798 crore. As part of its restructuring, MTNL merged its core operational assets with BSNL from January 1, 2025. This includes telephone exchanges, power plants, batteries, various types of cables, as well as critical software and hardware.
The government's decision to sell MTNL and BSNL's assets is a crucial step toward reviving the struggling telecom firms while also contributing to the broader asset monetisation push. Given MTNL's high debt burden and past defaults, the move comes at a critical juncture. The success of this monetisation plan will not only impact the telecom sector but also shape the government's disinvestment targets for the coming years.
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