BSNL cuts expenditure to ₹5,910 crore for FY27

State-owned Bharat Sanchar Nigam Limited (BSNL) said certain external and “unforeseeable” developments have led to a reduction in the requirement of funds multiple times between April and July of FY27 for Digital Bharat Nidhi-funded schemes and projects.

“During the current year (FY27), developments, most of them external and largely unforeseeable at the time of estimation, collectively resulted in the liabilities maturing within FY2026-27 being assessed lower than originally envisaged,” BSNL said in a letter to the Administrator of the Digital Bharat Nidhi, dated August 4, 2026.

ETTelecom has reviewed a copy of the letter.

BSNL, in its response, said that four project implementation agencies (PIAs) commenced execution significantly later than scheduled, and mobilisation advance could not be released in two packages earlier owing to non-fulfilment of the contractual preconditions under the tender T-791.

It further noted that capital expenditure (Capex) payments stand deferred as milestone-based claims are yet to mature, despite about 40,000 route-kilometres of optical fibre cable (OFC) having already been laid, invoices for which are yet to be submitted by the PIAs.

It said that significant right-of-way (RoW) constraints in Kerala, Karnataka, and Goa impeded OFC laying, deferring related expenditure.

The telco underscored that the ongoing Israel-US-Iran conflict has disrupted the global supply chain and the availability of critical raw materials for high-density polyethylene (HDPE) duct, OFC, and routers, causing shortages, price escalation, and slower execution, leading to force majeure.

It also said that litigation by unsuccessful bidders created uncertainty and caused the successful bidders to defer commencement of work.

The telco’s response followed the Department of Telecommunications’ (DoT) letter to the DBN Administrator to justify a sharp reduction in the estimates for the requirement of funds for FY27.

“Frequent changes in projections reflect a lack of diligence in estimation and planning for budgetary requirements, and cause unwarranted disruptions in achieving physical and consequently financial targets,” the telecom department said in the letter, seen by ETTelecom.

BSNL initially projected a requirement of ₹25,985 crore for FY27, which DBN rationalised to ₹22,220 crore, comprising ₹15,000 crore towards the Amended BharatNet Programme’s (ABP) Capex and ₹5,000 crore for operating expenditure (Opex).

However, the Ministry of Finance allocated ₹24,000 crore in budget estimates for the fiscal year 2027 for DBN-funded schemes and projects, consisting of ₹20,000 crore for Capex and ₹4,000 crore for revenue expenditure.

However, between April and July, the requirement for funds has been revised four times downwards to ₹12,000 crore, ₹10,400 crore, ₹8,839 crore, and ultimately to ₹5,910 crore, the telecom department said.

BSNL though justified that the estimates for FY27 were prepared on the basis of the implementation schedule and expenditure profile envisaged in the Cabinet approval for the Amended BharatNet Programme and other DBN-funded projects.

The telco defended that the downward revision of the amount is now “realistically expected to be drawn during FY 2026-27”, and is not a revision of the scope of the programme, nor does it reflect any “error or want of diligence in the original estimation”.

“BSNL further begs to submit that its act of promptly intimating the reduced requirement is, with utmost respect, an act of prudent and responsible financial management, and not a lapse,” it said.

Furthermore, it said that the variation in the projected requirement may be viewed as arising from genuine operational and external factors, and not from lack of diligence or deficiency in planning on the part of BSNL or its officers.