ITI was established in 1948 as India's first PSU. Ever since, as a pioneering venture in the field of telecommunications, it has contributed to 50% of the present national telecom network.
Expressing disappointment due to “lack of follow-up action”, the Standing Committee on IT has...
said the proposal needs to be “favourably considered” as it will increase the state-owned telecom company’s prospects of getting more work orders, an agency report said.
“It appears that no follow-up action has been taken by the department on this recommendation of the committee… The committee desires that the department should once again impress the Department of Defence Production for granting of DPSU status to ITI and upgrade necessary infrastructure,” the panel has said in a recent report on revival of the sick PSU.
The basic idea is that apart from taking up projects like Army Static Switched Communication Network (ASCON), NFS, radars, it may be able to participate in various other projects reserved for Defence PSUs.
According to studies done by Ministry of Defence and DRDO ITI has been found capable of meeting their requirements to support its point. The committee pointed to the huge Defence requirements of the country and said most PSUs, be it Bharat Electronics Ltd or Bharat Dynamics Ltd or Hindustan Aeronautical Ltd, are “over-flooded with demand”.
The committee suggested that the Telecom Department and ITI should collaborate with defence PSUs “to extract some work from them” and sought to be updated on the action taken. It said a study conducted by the Ministry of Defence in 2013 had suggested that ITI could be classified as Defence
PSU, and that DRDO too had echoed the view. However, the Department of Defence Production (DDP) had not favoured the proposal on the ground that it would not “facilitate” Defence orders for ITI, given that the PSUs have to compete with private players for getting contracts.
The ailing PSU earlier received Rs 150 crore last week as part of a revival package but the future of the PSU is still uncertain. Employees of the ailing PSU were not receving salaries since January this year. With the Centre disbursing the amount, the company has finally paid salaries to its 6,056 employees.
“As part of the Rs 4,156.79-crore revival package prepared by BIFR last year, we received Rs 150 crore last week for salaries. Accordingly, we have paid salaries from January to April, while May salary is still pending,” KL Dhingra, CMD, ITI, said.
The government has since 2014 released around Rs 300 crore as soft loan, Rs 190 crore for infrastructure upgrade and Rs 165 for payment of salary arrears, as per the 1997 wage revision.
This was apart from the Rs 150 crore.
ITI started incurring losses from 2002-03 onwards due to falling prices of telecom equipment, rapid changes in technology, the high cost of production and labour costs and, importantly, competition from private players abroad. While the telecom sector saw rapid growth, ITI saw a decline.
The company has been reducing its losses in the recent past. It reported a Rs 297-crore net loss for 2014-15, the lowest in the last 13 years. Despite being referred to BIFR in 2004, the revival package was approved only in 2014.
With state-of-the-art manufacturing facilities spread across six locations and a countrywide network of marketing/service outlets, the company offers a complete range of telecom products and total solutions covering the whole spectrum of Switching, Transmission, Access and Subscriber Premises equipment.