The government on Friday approved a soft loan of Rs 200 crore for paying salaries to employees of loss-making PSU Indian Telephone Industries (ITI) Ltd. The move is expected to mitigate the hardship being faced by the company in paying its employees. ITI Ltd had 7,633 employees as on December 1, 2013.The decision was taken by the Cabinet Committee on Economic Affairs (CCEA).
“The soft loan will ensure that employees of ITI Ltd receive their salaries on time and motivate them to work in the company, which is on a slow and steady comeback trail from being a ‘sick’ company,” an official statement said.
Bangalore-based ITI Ltd was established in 1948 and converted into a PSU in 1950. It is the first PSU in the country. The company incurred accumulated losses to the tune of Rs 4,527 crore as on March 31, 2013. The current level of losses of ITI Ltd is largely on account of lack of profitable orders and heavy interest burden on borrowings. With shrinking of demand for fixed telephone lines, the company had diversified its business from production of fixed lines equipment to GSM equipment, trading activities and turnkey projects.PTI