The Telegraph
Monday , November 19 , 2012
Since 1st March, 1999
CIMA Gallary

FM threat to take away idle PSU cash

New Delhi, Nov. 18 (PTI): Finance minister P. Chidambaram today said the central PSUs had been put on notice to either invest their surplus cash or lose it.

“We have already put (PSUs) on notice, no one will be allowed to fall short of (the) announced intention to invest. If they have not invested and they still have surplus cash, they have been told to invest... the principle is use it or lose it,” he said.        

At the beginning of this fiscal, each central PSU had committed itself to invest a certain amount.

Chidambaram said the performance of the chairman and managing directors would be measured by how much their company had invested in terms of the declared intention.        

About 25 central PSUs, including blue chip companies such as ONGC, GAIL (India) Ltd, NTPC, SAIL, and Bhel, have surplus funds worth Rs 2.5 lakh crore.

It is possible that PSUs failing to invest their surplus cash will be required to declare special dividends benefiting the government.        

Chidambaram said the performance of the PSUs on the investment front would be reviewed in January.

Stressing that investment is key to growth, he said there was reluctance among industry to invest because they perceived a number of hurdles to investment and did not see the economic situation very “propitious or conducive”.        

“I think some steps we took in September has broken this wave of fear but some part of it is still there,” he said, adding the real work is to get the engine of growth started again.

Investment board

Chidambaram today indicated that the proposal to set up the National Investment Board (NIB) to expedite clearance to large projects would soon come up for approval before the cabinet.

“The cabinet note is with the cabinet secretariat and the Prime Minister’s Office. It will be listed before the cabinet at a time the PM decides it should be listed. But I saw in some newspapers... that it is likely to be listed,” he said.

Concerned over delays in implementation of several mega projects, Chidambaram had proposed the setting up of the NIB under the Prime Minister to clear large projects.