Modi Govt Eyes Rs 1,000 Cr Fundraising for BSNL, MTNL Revival in FY26

Prime Minister Modi-led Government is planning to raise around Rs 1,000 crore in the financial year 2025-26 to financially revive state-owned telecom companies Bharat Sanchar Nigam (BSNL) and Mahanagar Telephone Nigam (MTNL). The government is mulling to raise the funds by using land parcels owned by two telecom firms, MoneyControl reported. 

Through the fundraise, the government is hoping to ease the debt burden and to improve the liquidity of the state-owned telecom firms. The move will involve the sale or leasing of land assets identified by the finance ministry’s Department of Public Enterprise (DPE). The target to raise the fund will depend on the sale or lease of these land parcels, which might meet certain procedural delays or challenges, given the fact that land is a state list subject. The centre will need to get the state government, for which these identified land parcels are to be on the same page, to proceed with the monetisation plan.

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“BSNL has two or three land parcels under consideration. The total land value from both BSNL and MTNL is approximately Rs 1,000 crore, which is likely to be monetised this year,” MoneyControl reported, citing an official source. “Land is not an easy subject. It is a state subject. All the documents, everything has to be in place,” the official added. 

The fundraise is part of the government’s broader initiative to revive the financially strained state-run companies driven by increasing operational costs, a declining user base and surging debt. MTNL reportedly defaulted on loans worth Rs 8,346 crore across seven public sector banks. Its total liability stood at Rs 33,000 crore as of March 31, 2025. On the other hand, BSNL’s debt stood around Rs 23,297 crore as of November last year. 

Additionally, cabinet secretary TV Somanathan is set to have a meeting on May 16 with the head of public sector banks to prevent any adverse action against MTNL due to default on loans, Moneycontrol earlier reported. In the meeting, the secretary is likely to discuss ways to prevent MTNL’s accounts from being declared as non-performing assets (NPAs).