PM to PSUs: Invest cash pile for growth

PSU chiefs seek more operational freedom,want sectoral groups under PMO for strategic decisions

Written by ENS Economic Bureau | New Delhi | Published: October 24, 2012 12:53:18 am

In their meeting with Prime Minister Manmohan Singh,the country’s top public sector undertakings have asked for an ‘Empowered Group of Secretaries’ under the PMO to be constituted for each sector that the respective PSUs can approach on important strategic decisions.

Responding to the strong pitch made by these firms for greater autonomy and ironing out the bottlenecks,the Prime Minister is learnt to have constituted a two-member group headed by Cabinet Secretary Ajit Kumar Seth to iron out the procedural issues and administrative roadblocks highlighted by the PSUs. At the meeting,Singh asked the central PSUs to invest their surplus fund of around Rs 2.5 lakh crore “for driving investment,growth and jobs”.

“Investing such cash surplus would help in re-igniting the growth impulses that are present in the economy,” Singh was quoted in a statement issued after the meeting from the Prime Minister’s Office said.

NTPC CMD Arup Roy Choudhury is learnt to have made a presentation at the meeting,which was attended by 25 PSU chiefs.

The demands made by the state-owned firms included the need for a Committee of Secretaries to resolve internal and domestic issues such as coal shortages and environment clearances.

Apart from this,they asked for the decisions on foreign acquisitions and takeovers be left entirely to the company’s Board and that the Department of Public Enterprises’ guidelines for foreign travel of CMD and directors be followed.

Also,a minimum tenure of 5 years for CMDs and 3 years for directors,independent directors to be selected in consultation with CMD and greater autonomy to Boards on employee issues was sought by the firms.

In his message to the undertakings,the Prime Minister said the country should achieve a growth level of 8-8.5 per cent regardless of what happens in the world economy.

“We must learn to swim and swim fast enough,whatever be the circumstances… Even if the international demand is not there,domestic demand should drive the investment and our endeavours.” he said,adding that there is a need for improving coordination in expediting project clearances and for generating an appropriate long term vision.

Briefing reporters about the meeting,Heavy Industries and Public Enterprises Minister Praful Patel said: “Central public sector enterprises have large investible surpluses… If the PSUs do not deploy the investible surpluses in their own growth and expansion,that money should not lie idle and it must be paid back to the government by way of special dividend.”

ONGC,Coal India,BHEL,NTPC,SAIL,NMDC,Shipping Corporation of India are among the firms that attended the meeting. Patel said the Committee of Secretaries,headed by the Cabinet Secretary,will be set up to look into autonomy and regulatory clearances,besides investment of surplus funds.

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