Cabinet approves Integrated Energy Policy

NEW DELHI: The government on Friday approved an Integrated Energy Policy that envisions a road-map for sustainable growth with energy security over a reasonable period of time.

The policy seeks to make energy markets more competitive, have market-determined energy pricing and resource allocation, transparent and targeted subsidy disbursal and improved efficiency. The policy, prepared by the Planning Commission, aims at optimal exploitation of domestic energy resources and exploring and acquiring energy assets abroad to attain energy security for the country.

Home Minister P Chidambaram, who briefed reporters on the approval of the integrated energy policy, said that the government will set up a monitoring committee under the chairmanship of the Cabinet Secretary to review the progress of implementation of the policy.

The Cabinet Committee on Economic Affairs (CCEA) gave its approval to Suzlon Energy's proposal to undertake Right Issue of equity to its existing shareholders. The approval, which is subject to the conditions recommended by the Foreign Investment Promotion Board (FIPB), allows Suzlon to make the Right Issue of equity to its existing shareholders including persons resident outside India for an amount not exceeding Rs 1,800 crore.

In what will lend additional risk cover for micro, small and medium exporters (MSMEs), the CCEA gave its approval for allocation of Rs 350 crore to Export Credit Guarantee Corporation of India (ECGC). The fund which will come from the National Export Insurance Account (NEIA) will provide higher risk cover to MSME exporters, which will go up from the existing 85% to 95%. For banks financing such MSME exporters, the riskk cover is being enhanced from the present 75% to 85%.

The CCEA also extended a scheme that allows public sector enterprises (PSEs) to invest their surplus funds in select mutual funds. The government had in August 2007 withdrew prohibition on investing surplus funds of navratna and miniratna PSEs in public sector mutual funds, a decision which it was to review a year later. With Friday's decision, the scheme has been extended from August 2008 till further orders.