Profit-making PSUs may get to by-pass PIB’s approval
Profit-making public sector undertakings may no longer require Public Investment Board’s (PIB) approval, while taking an investment decision.
By Rajeev Jayaswal, TNN |
NEW DELHI: Profit-making public sector undertakings (PSUs) may no longer require Public Investment Board���s (PIB) approval, while taking an investment decision. The move will allow public sector companies like ONGC, IOC, Bhel and Gail to take any investment decisions without any limit.
Prime Minister Manmohan Singh has in-principle approved a proposal, which would exempt profit-making public enterprises from waiting for PIB approval before undertaking any expansion exercise. The decision would help all profit-making PSUs including Navratnas and Mini-Ratnas, sources in the government said.
The exemption would, however, be conditional. Only those profit-making PSUs will be allowed to by-pass PIB, which have low budgetary support from the government and which would not seek sovereign guarantee (except for multilateral loans) for their expansion plans, sources said.
It is also stipulated that such projects must be approved by leading financial institutions (FIs) and they would agree to fund ���specified��� percentage of the entire project cost.
It is learnt that the Prime Minister���s Office has asked the Expenditure Secretary and the Planning Commission to work on the issue urgently and frame regulations in this regard. A notification to this effect is expected soon. The PIB considers investment proposals of PSUs. ���Under the existing guidelines, central sector projects costing Rs 100 crore and above are considered by PIB,��� a source in the Finance Ministry said.
Secretary (Expenditure) in the Finance Ministry is the chairman of the PIB and joint secretary (plan finance-II) acts as the secretary to the Board. In respect to Navratnas and Mini-Ratnas, government had recently enhanced investment ceilings. Navratnas��� investment in one project is limited to Rs 1,000 crore. While the same is Rs 500 crore and Rs 250 crore for Mini-Ratnas I and II respectively.
The PM���s decision is in tune with the pledge made in the National Common Minimum Programme (NCMP), which promises full managerial and commercial autonomy to successful profit making companies so that they grow fast in a competitive environment.
Prime Minister Manmohan Singh has in-principle approved a proposal, which would exempt profit-making public enterprises from waiting for PIB approval before undertaking any expansion exercise. The decision would help all profit-making PSUs including Navratnas and Mini-Ratnas, sources in the government said.
The exemption would, however, be conditional. Only those profit-making PSUs will be allowed to by-pass PIB, which have low budgetary support from the government and which would not seek sovereign guarantee (except for multilateral loans) for their expansion plans, sources said.
It is also stipulated that such projects must be approved by leading financial institutions (FIs) and they would agree to fund ���specified��� percentage of the entire project cost.
It is learnt that the Prime Minister���s Office has asked the Expenditure Secretary and the Planning Commission to work on the issue urgently and frame regulations in this regard. A notification to this effect is expected soon. The PIB considers investment proposals of PSUs. ���Under the existing guidelines, central sector projects costing Rs 100 crore and above are considered by PIB,��� a source in the Finance Ministry said.
Secretary (Expenditure) in the Finance Ministry is the chairman of the PIB and joint secretary (plan finance-II) acts as the secretary to the Board. In respect to Navratnas and Mini-Ratnas, government had recently enhanced investment ceilings. Navratnas��� investment in one project is limited to Rs 1,000 crore. While the same is Rs 500 crore and Rs 250 crore for Mini-Ratnas I and II respectively.
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The PM���s decision is in tune with the pledge made in the National Common Minimum Programme (NCMP), which promises full managerial and commercial autonomy to successful profit making companies so that they grow fast in a competitive environment.
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