Announcing the decision, Finance Minister P Chidambaram said Rs 1,408.9 crore (Rs 14.08 billion) would be reimbursed to BSNL, which is two-third of Rs 2,113.35 crore (Rs 21.13 billion) payable by the public sector undertaking towards licence fee and spectrum charges for the current financial year (2004-05).
The Cabinet also cleared one-third of the licence fee and spectrum charges payable by BSNL in the year 2005-06, which comes to about Rs 700 crore (Rs 7 billion) and this would be reimbursed to BSNL in the next fiscal.
The Cabinet approved reimbursement of backlog worth Rs 591.02 crore (Rs 5.91 billion) on account of shortfall in the reimbursement of licence fee and spectrum charges paid by BSNL for the years 2001-02 to 2003-04.
Commenting on the decision, BSNL officials said, "We appreciate government's support to BSNL. Given the huge responsibilities of BSNL it would have been better if the higher amount was reimbursed to meet our social targets, especially for the rural areas."
In another decision, the Cabinet cleared the proposal of the absorption of Group A officers belonging to Indian Telecom Services, P and T accounts and Finance Services and others in the two telecom PSUs, BSNL and MTNL.