In a bid to rescue debt-ridden ITI, the government today asked telecom companies BSNL and MTNL to procure 30 per cent of their equipment from the state-run telecom equipment maker for another two years.
This is with effect from September 21, 2010.
"BSNL and MTNL will give 70 per cent advance against the orders placed on ITI so that the company does not face the problem of working capital for the execution of the orders," an official statement said.
The decision was taken at the meeting of Cabinet Committee on Economic Affairs (CCEA), which met here today.
The extension of the benefit of 30 per cent reservation quota with 70 per cent adavnce from BSNL and MTNL will ensure enough orders for ITI for the production activities.
"In today's highly competitive environment, it is very difficult for ITI to survive on its own without the benefit of quota which BSNL/MTNL has been exenting for the company for the last many years," the statement added.
ITI has incurred loss of Rs 3,513 crore as on March 31, 2010.
In order to enable ITI to survive in the competitive environment of telecom manufacturing, BSNL and MTNL have been executing reservation benefit of 30 per cent along with 70 per cent advance to ITI.
ITI has units at Palakkad, Bangalore, Srinagar, Naini, Rae Bareli and Mankapur.
For long ITI had been enjoying the preferred vendor status from BSNL and MTNL under a reserved category.
