Govt approves extension of order benefits to sick ITI
In an attempt to revive loss-making ITI, govt has approved a proposal under which the co will continue to get orders for 30% of products requirement.
New Delhi: In an attempt to revive loss-making telecom equipment manufacturer ITI, the government today approved a proposal under which the company will continue to get orders for 30 per cent of products requirement of BSNL and MTNL in reservation quota.
The Cabinet Committee on Economic Affairs (CCEA) has
decided to continue with the reservation quota at 30 per cent
of the requirement of BSNL and MTNL for products manufactured
by ITI. Moreover, BSNL and MTNL would give 70 per cent advance
against orders placed on ITI.
However, the CCEA made it clear that ITI would accept
orders under the reservation quota only after the price is
known and is commercially viable.
The earlier reservation benefit of 30 per cent along with
70 per cent advance to ITI had expired on September 20, 2009.
BSNL and MTNL has been requested to extend these benefits
to ITI for one year from September 21, 2009 due to poor
financial health of the telecom equipment manufacturer.
ITI incurred an accumulated loss of Rs 3,219 crore on
March 31, 2009.
The extension of order benefits from BSNL and MTNL will
ensure enough orders for ITI for production activities.