DPE cell to scout for resources worldwide

Special cell to act as a single-window for PSUs to scout for opportunities abroad,expedite acquisitions.

India has stepped up its resource diplomacy efforts by deciding to set up a special cell within the department of public enterprises that will scout for opportunities across the globe and simultaneously assist a high-level secretarial panel in expediting acquisitions by state-owned undertakings.

The special cell will act as a single-window mechanism for PSUs and their administrative ministries to push through proposals that require Cabinet clearance, said a government official. The decision was taken at a meeting chaired by cabinet secretary-in-waiting Ajit Seth late last month.

Chairing a meeting of the Group of Officers GoO on May 24,Seth endorsed a proposal by the Department of Public Enterprises DPE on setting up a special cell to provide secretarial support to the Coordinating Committee of Secretaries CCoS. At the behest of the Prime Minister8217;s Office,the DPE had prepared a policy note on acquisition of raw material assets by central PSUs. It had suggested creation of a Empowered Committee of Secretaries ECS in ministries like steel,coal and petroleum to expedite the process of overseas acquisitions. But the GoO found that the ECS mechanism was suffering from shortcomings like delays in decision making,lack of coordinated and inter-sectoral approach and absence of state funding to help acquisitions. Accordingly the GoO has recommended that to help the DPE service CCoS better,a special cell should be created within it with an annual budgetary outlay of Rs 1.5 crore. This cell would carry out country-wise analysis of resources and their polices and help the PSUs and to push through proposals on acquisition of global mineral assets, a senior government official told The Indian Express.

The government has already offered to extend a credit line of nearly Rs 20,000 crore to the PSUs for executing such acquisitions in Southeast Asian and African nations,although it has firmly ruled out setting up any Sovereign Wealth Fund like China which is worth 180 Billion.

The proposed policy for which DPE is expected to seek the union cabinet8217;s approval soon has been vetted by almost all concerned ministries,who are increasingly keen to help their respective units secure overseas assets to offer them some cushion from rising input costs which was and ripping through their bottomline. The GoO has recommended that the said policy should be made applicable to those central PSUs in agriculture,mining,manufacturing and electricity sectors,who have registered net profits for three consecutive years, the official said.

The GoO has also endorsed the policy prescription on delegating more powers to the boards of maharatna and navratna PSUs in helping acquisition of overseas mineral assets,he pointed out. The policy suggests that the acquisition powers of navratna CPSEs be increased from Rs 1,000 crore in a single project to Rs 3,000 crore,subject to a ceiling of 25 per cent of the net worth of the firm. The overall ceiling on all such investments is proposed to be enhanced from existing 30 per cent to 40 per cent of the net worth of the maharatna and navratna CPSEs, it says.

However,the GoO asked the DPE to justify its contention in empowering the Boards more than what is currently in vogue in its cabinet note. Officials from the ministry of external affairs said that the ministry would instruct missions abroad to actively participate in the process if acquisitions by Indian companies.