Online BusinessGovt approves extension of order benefits to sick ITI
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.
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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.