The government today approved a Rs 4,156.79-crore plan for revival of ailing ITI Ltd which is expected to be implemented over a period of 18 months.
The Cabinet Committee on Economic Affairs (CCEA), headed by Prime Minister Manmohan Singh, approved the revival plan of ITI Limited based on the recommendations of the Board for Reconstruction of Public Sector Enterprise (BRPSE).
The CCEA, an official statement said, has also approved regular monitoring of the implementation of the revival plan to be done by suitable committees which will be constituted at the corporate level and unit level in ITI and by an Apex Committee to be chaired by Telecom Secretary.
"Out of Rs 4,156.79 crore, capital grant of Rs 2,264 crore will be given in the form of equity for project implementation (CAPEX) for up-grading manufacturing infrastructure at various units and for new projects," the statement said.
The balance Rs 1,892.79 crore will be financial assistance in the form of grant-in-aid for statutory liabilities and other commitments made by ITI such as redemption of preferential share capital of BSNL/MTNL, arrears due to 1997 pay revision and VRS.
"The revival plan is expected to be implemented over a period of 18 months. With the cleaning of the balance sheet to a certain extent, ITI will be able to raise resources for their operations and compete in the market," the release said.
Further, it said, with upgrading of the manufacturing infrastructure at its plants, ITI will be able to manufacture new technology products in telecom / diversified fields and able to increase its market share.
ITI Ltd, earlier known as Indian Telephone Industries Limited, was established in 1948 and later converted as the first PSU of the country to assist the Government in the sensitive and strategic telecommunication field.
Government holds majority equity stake in the Company. The company was referred to the BIFR in 2004-05 and declared a sick company.
In another decision, the CCEA approved extension of two months (up to February 28, 2014) in the implementation period of the Revival, Reform and Restructuring (RRR) package for the handloom sector. Earlier the last date of implementation period of this scheme was December 31, 2013.
The initiative is expected to benefit about 1,500 additional apex and primary weavers cooperative societies in addition to 4,739 societies covered till December 31, 2013 under modified RRR package, the government said in a statement.
"There is no financial implication of the proposal as the RRR package would be implemented according to the approved financial outlay of Rs 3,130 crore out of which Rs1,100 crore is for waiver of overdue loan and recapitalisation assistance and Rs 2,030 crore for concessional credit component," it added.
