New Delhi: The government will review investment of surplus funds by cash-rich Central Public Sector Enterprises (CPSEs) in January next year and those companies which fail to invest would have to declare special dividends, sources said.
"In January 2013, the government will review investment of surplus funds by the PSUs and those companies which fail to invest their cash reserves have to declare special dividends," sources told PTI.
Finance Minister P Chidambaram has asked CPSEs, which have substantial cash reserves, to invest their reserves as per their investment plan, they said.
The issue arose for discussion during a meeting convened by Prime Minister Manmohan Singh with heads of 25 CPSEs such as ONGC, GAIL, NTPC, SAIL, and BHEL last month.
Besides, the meeting was attended by Finance Minister and Planning Commission Deputy Chairman Montek Singh Ahluwalia.
The cash-rich PSUs were asked to invest their excess cash reserves to accelerate the economic growth at the meeting.
The development comes in the wake of the government finding it hard to meet the fiscal deficit target of 5.1 percent of the country's Gross Domestic Product (GDP) for the current fiscal.
At present, about 25 central PSUs have surplus funds worth Rs 2.5 lakh crore.
Earlier this year, the government had formed a committee of the Department of Public Enterprises (DPE), headed by Additional Secretary in the Department of Economic Affairs Shaktikanta Das, in this regard.
Besides rationalising existing investment norms for PSUs, the panel is contemplating tightening norms for use of surplus funds by these PSUs by restricting the investments to debt schemes of mutual funds with a minimum corpus of Rs 1,000 crore.
The present guidelines do not specify any corpus size of mutual fund company for investments by PSUs.
CPSEs would also have another option to park their funds in term deposits with any scheduled commercial bank and with a net worth of Rs 500 crore. Currently, this limit is Rs 100 crore.
Under the new guidelines, the government is expected to offer a number of options like mutual funds, term deposits, treasury bills and government securities to CPSEs for investing their surplus funds.
At present, there are various norms issued by the DPE on investment of excess funds available with such PSUs.
First Published: Sunday, November 11, 2012, 13:28