The Prime Minister wants public sector undertakings to either invest their surpluses or give them as special dividend. The PSUs are sitting on nearly Rs 2.50-lakh crore.
Simultaneously, he has decided to set up a high-power committee, headed by the Cabinet Secretary, to sort out various investment-related issues. The Prime Minister will meet the heads of PSUs every six months.
At his first ever interaction with 25 PSU chiefs, Prime Minister Manmohan Singh sent out the message on investment and special dividend. It comes at a time when the Government is trying to step up the investment level to 37-38 per cent of GDP. The country achieved a high investment rate of 38 per cent in 2007-08, and in that year GDP grew at 9.3 per cent. A special dividend would help the Government narrow the fiscal deficit and bring it close to the Budget target of 5.1 per cent of GDP.
“The meeting discussed autonomy and other issues in making investments. We will work out with them to overcome these,” Heavy Industries Minister Praful Patel told newspersons after the meeting.
He also said that PSUs have major investment plans, but they have issues such as environment clearances and approval at the State level. To resolve these issues, apart from the Committee of Secretaries, the plan is also to create a high-level mechanism involving the Planning Commission and the Finance Ministry, he added.
“The Government would like them to invest in a realistic and time-bound manner to gain,” Praful Patel said. On September 9, Finance Minister P Chidambaram had asked nine top PSUs to invest more and more.
Another important issue, discussed at today’s meeting was more financial autonomy. These companies have certain caps on spending and investment. They want that it be further expanded and liberalised so that they are able to operate much more freely in an ever changing world.
Praful Patel did say the meeting discussed broadly the disinvestment of PSUs but not about specific case. The Government has lined up 11 companies for disinvestment to mobilise at least Rs 30,000 crore. However, even after almost seven months of this fiscal, it has yet to open the account.