BSNL, MTNL directed to continue propping up loss-making ITI

The Union government has directed state-run telecom majors, BSNL and MTNL, to continue placing 30 per cent of their product orders with ITI, the loss-making government undertaking.

A decision to this effect was approved by the Cabinet Committee on Economic Affairs (CCEA) today.

BSNL and MTNL will also continue to give 70 per cent advance payment against orders placed on ITI, so that the latter does not face a working capital problem in executing these orders, subject to some safeguards for properly utilising these advances.

CCEA says ITI is to 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. Both telecom PSUs have been requested to extend these benefits to ITI for another year, due to the latter’s poor financial health. It will be reviewed again after a year.