On Wednesday, a major piece of news emerged. The Union Cabinet approved a revival package worth Rs 89,000 Cr for BSNL, the public sector entity. The news has shocked voters of privatization. "BSNL hasn't been a match to the efficiency and reach of Jio, Airtel and Vodafone Idea. Why is the government wasting taxpayers' money on reviving a public sector unit when private players are doing the job much better already?" many asked on social media.
Is the Modi government really stupid in announcing the revival package? Is it really wasting Rs 89,000 Cr? The answer is complex.
Analysts who are backing the government's decision are of the view that BSNL is a strategic asset since it is operating in a strategic area. It is the only public sector telecom operator serving the remote parts of India. Its subscriber base is nearly ten crore. Moreover, almost the entire amount from the revival package will go into buying spectrum, an asset BSNL will put to use to serve its customer base. BSNL wants to make its mark in 4G and 5G services.
In short, the government has given money from its left pocket to its right pocket.
But there is a counter argument to this as well. Why can't the government sell the same spectrum to some private player, which can use it more efficiently? Critics who believe in privatization are of the view that the government doesn't dare to sell companies like BSNL because it fears massive politicization and a serious backlash from government employees, whose votes are important in winning elections.
