In a bid to revive the financial health of the Indian equipment manufacturer ITI Limited, the government is planning to infuse Rs 5 billion in the PSU. The capital infusion is line with the revival proposal approved by the Cabinet for ITI.
In February 2014, the Cabinet Committee on Economic Affairs (CCEA) had approved a revival plan of ITI based on recommendations of Board for Reconstruction of Public Sector Enterprise (BRPSE). The government had approved Rs 41.56 billion plan for revival of ITI?s revival, which is expected to be implemented over the next 18 months. The plan involves upgradation of its manufacturing infrastructure to help ITI produce new technology products in telecom domain and increase its market share.
Of Rs 41.56 billion package, Rs 22.64 billion is to be provided in the form of equity for project implementation (CAPEX) for up-grading manufacturing infrastructure at various units and for new projects. The remaining Rs 18.92 billion is to be provided as 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 Bharat Sanchar Nigam Limited/Mahanagar Telephone Nigam Limited, arrears due to 1997 pay revision and VRS.
Established in 1948 and later converted as the first PSU of the country to assist the government in telecommunications, ITI offers a complete range of telecom products and solutions covering switching, transmission, access and subscriber premises equipment.
The company, in which the government holds the majority equity stake, was referred to the Board for Industrial and Financial Reconstruction (BIFR) in 2004-05 and declared a sick company.
