New Delhi, Dec 24 (ANI) : The Cabinet Committee on Economic Affairs (CCEA) on Thursday approved the proposal of Department of Telecommunications regarding continuation of reservation quota for Indian telecom Industry (ITI) Limited.
With this the Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telecom Nigam Limited (MTNL) have to reserve a minimum of 30 percent of their product requirements to ITI.
The Bangalore based ITI Ltd., a Public Sector Undertaking under Ministry of Communication and IT, Department of Telecommunications (DoT) has incurred accumulated loss of Rs.3219 crore in the last fiscal.
As the financial position of ITI is very bad the CCEA, directed DoT to bring up a comprehensive proposal for financial restructuring of the Company.
Accordingly, a revival package for ITI is under consideration of the Telecom Department.
In order to enable ITI to survive in the competitive environment of telecom manufacturing, BSNL and MTNL have been extending reservation benefit of 30 percent along with 70 percent advance to ITI Ltd.
The ITI would accept orders under reservation quota only after the price is known and further if the same is commercially viable.
The BSNL and MTNL will give 70 percent advance against the orders placed on ITI so that ITI does not face the problem of working capital for the execution of the orders subject to adequate safeguards for proper utilization of these advances.
The aforesaid policy measures shall remain in force for a period of one year with effect from 21.09.2009 and shall again be reviewed considering the financial health of ITI and advantages derived in revival package as decided by CCEA. (ANI)