MTNL Revival: India Plans Asset-Transfer Framework To Aid Debt-Ridden Telcos

The Union government is preparing a new framework to streamline the transfer of immovable assets, such as land and buildings, owned by telecom PSUs like BSNL, MTNL and ITI, to ministries and departments in a significant move to optimise public sector resources.

The initiative aims to simplify internal transfers, support ongoing restructuring efforts and accelerate asset monetisation. A high-level meeting, chaired by the cabinet secretary on Thursday, concluded with a decision to develop comprehensive guidelines for the process. The meeting was attended by senior officials from the Department of Telecommunications and the Ministry of Finance.

Sources indicate that the new policy will address procedural hurdles and establish a clear, efficient mechanism to unlock and redeploy underutilised properties across various government entities.

Currently, the sale of PSU assets typically requires a formal bidding process, which is time-consuming. The proposed inter-ministerial transfer framework could significantly cut down on this timeline, expediting monetisation efforts.

The move is particularly critical for Mahanagar Telephone Nigam Ltd., which is facing acute financial distress. The company has defaulted on Rs 8,346 crore in bank loans, prompting concern from lenders during a May 9 meeting with finance ministry officials.

In addition to the bank debt, MTNL is saddled with Rs 24,071 crore in sovereign-guarantee bonds and Rs 1,151 crore in unpaid bond interest to the Department of Telecommunications, bringing its total financial liabilities to Rs 33,568 crore as of March 31. The SG bonds are set to mature by 2034.

The upcoming guidelines are expected to contribute significantly to the restructuring of telecom PSUs by improving internal asset utilisation and reallocating idle government-owned properties to priority sectors. The effort aligns with the government's broader strategy to boost operational efficiency and reduce fiscal pressure on state-run enterprises.

Detailed guidelines are expected to be shared with the ministries concerned within the next 10 days.