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CCEA approves reservation package for ITI | 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
anchar 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 & 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. |
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