New Delhi, Jul 31 (IANS): State-run BSNL will disburse the salaries for July to its employees by August 5 from its internal accruals, its CMD P.K. Purwar said on Wednesday.

"Today is 31st July. We are working on it. We will do it. We will surely give the salary by (August) 4th or 5th out of internal accruals", Purwar told IANS.

In February this year, BSNL had defaulted on salaries, paying them on March 15 due to tightening revenue conditions. This will be the second time the struggling PSU will fail to pay salaries on time.

Since there is no budgetary support from the Finance Ministry, the Department of Telecommunications is not in a position to give any immediate finance support to BSNL.

There was a meeting of state-run banks with Telecom Secretary on July 22 and there has been some progress in processing of loans and BSNL is trying hard to disburse the salary for July in the first week of August, another person in the know of the development said.

"At present, the BSNL management is clearing some part of pending dues of vendors amounting to over Rs 3,000 crore from internal accruals and thereafter from internal accruals only, within 10 days or so, they will clear the salary of the employees," All India BSNL Employees Union General Secretary Prahlad Rai told IANS.

Having a monthly salary bill of Rs 850 crore, BSNL is currently passing through one of the worst financial crises and the government is looking at various options, including VRS, its merger with MTNL and giving 4G spectrum to it as part of resurrecting the PSUs. However, no decision has so far been taken.