The Cabinet Committee
on Economic Affairs has approved the financial assistance of Rs. 130
crore in the form of grants-in-aid to M/s Indian Telephone Industries
Ltd. (ITI Ltd.), for mitigating the hardship being faced by the company
in paying salary to its employees, for the next four months.
The grants-in-aid will ensure that the employees of M/s ITI Ltd. will
get their salary in time and be motivated to work in the company, which
is on a slow and steady come back trail from being a `sick` company.
The direct beneficiaries will be the employees of M/s ITI Ltd. whose
strength as on 1st February 2012 was 9655 and their family members.
M/s ITI Ltd., Bangalore, a Public Sector Undertaking under the Ministry
of Communications & IT, Department of Telecommunications (DoT) was
established in 1948 and converted into a PSU in 1950. It is the first
PSU of this country. The company has incurred accumulated loss of Rs.
4149 crore till the end of September 2011.
Due to a change in the technology preference in the market coupled with
inadequate in-house infrastructure and R&D for catering to an
exponential increase in wireless technology, M/s ITI Ltd. has not been
able to compete on its own strength. The high fixed costs alongwith the
social obligation of running some of the non-profitable operations in
the past, have resulted in the inability of the company to invest in R&D
and new product lines, which could have helped the company to achieve
better margins in this highly competitive market, where most
technologies become obsolete very fast.