press trust of india
NEW DELHI, 16 JUNE: The government is considering relaxing investment norms for public sector units (PSUs) and may allow them to park their surplus funds in private sector mutual funds.
Currently, PSUs are allowed to park their funds only in public sector mutual funds.
“Now, the government wants to give some flexibility to PSUs and provide them level-playing field vis-a-vis private companies,” an official said.
“Therefore, it has proposed that there should be certain limit for investing in public mutual funds and PSUs should be allowed to invest rest of their funds either with private or public sector mutual funds,” he added.
He, however, did not disclose the percentage of surplus funds that PSUs would be required to invest in public sector mutual funds.
The proposal was a part of the report prepared by a committee of the department of public enterprises (DPE), which was headed by department of economic affairs additional secretary Shaktikanta Das.
The panel was constituted to review guidelines on investment of excess funds available with cash-rich PSUs.
With a view to boost investment and promote growth, the government is working out new norms for utilisation of cash-rich PSUs’ surplus funds, estimated at around Rs 2.8 lakh crore.
“The DPE is in the process of preparing the note in this regard. After the inter-ministerial consultations are over, the note will be sent to the Cabinet Committee on Economic Affairs for its consideration,” the official said.
The committee is in the process of rationalising and consolidating the existing investment norms for PSUs, the official said.
At present, there are number of guidelines issued by the DPE in regard to investment by PSUs.
Given the current economic scenario, there is a need to come out with one set of comprehensive guidelines to impart some flexibility to PSUs to invest their surplus money as it will also contribute to country’s growth, the official said.
Besides, the panel proposed that PSUs should invite bids from banks for parking their surplus funds. At present, PSUs park their funds with whom they have regular business. “This will help these companies get better returns on their funds,” the official said.