India’s union cabinet has approved the Department of Telecommunications (DoT)’s proposal to continue reservation quota for ITI in procurement made by BSNL, MTNL and Bharat Broadband Network (BBNL).

ITI, BSNL, MTNL and BBNL are owed by India government. The nod was given by the Cabinet Committee on Economic Affairs (CCEA) in a meeting chaired by Prime Minister Narendra Modi.

According to the Reservation Quota policy, 30 percent of the procurement orders placed by BSNL, MTNL and BBNL will be reserved for ITI for the products manufactured by it and for those outsourced items in which there will be a minimum 5 percent value to be added by it during 2016-17 and 8 percent value addition in 2017-18.

“20 percent of the orders will also be kept reserve for the state-run company for the turn key projects like global system for mobile communication network roll-out of BSNL and MTNL and for national optical fibres network (NOFN) roll-out for BBNL,” an official statement said.

The government said that the public sector unit would accept orders under reservation quota only after the price is known and if the same is commercially viable. “The policy measures shall remain in force for a period of two years,” it said.

The Government feels that it would be very difficult for ITI to survive on its own without the benefit of reservation quota which BSNL / MTNL has been extending for ITI for the last many years.

Provision of reservation quota from BBNL will provide further boost to the order book of ITI and help in improving its financial health.