The first budget of the new UPA regime has brought cheer to the ailing Indian Telephone Industries (ITI) Ltd by allocating Rs 2,820 crore to wipe off its losses.
The company has a manufacturing unit in Rae Bareli, which is none other than UPA chairperson Sonia Gandhi’s constituency.
ITI is India’s first public sector undertaking (PSU) and makes telecom equipment. It employs 12,000 people.
The company first went in the red in 2001 and since than has accumulated losses of Rs 2,800 crore.
After writing off the losses, the company would be able to go ahead with its disinvestments plans, in three of its units, with a clean slate, said a department of telecommunications (DoT) official.
The government plans to hive off the Rae Bareli, Naini and Bangalore units and form joint ventures. It would then sell stakes in these units, the official said.
This is not the first time that the company is getting government largesse.
A budgetary favourite of the UPA government, it got Rs 1,025 crore as a bailout package in 2005-06. And earlier this year, in January, the cabinet approved an interest free loan of Rs 125 crore to pay salary of its employees.