New Delhi: Faced with difficult government finances, Prime Minister Manmohan Singh Tuesday asked cash-rich 25 central PSUs to invest their surplus fund of Rs 2.5 lakh crore to reignite economic growth.
In a meeting convened by the Prime Minister and also attended by Finance Minister P Chidambaram, the top PSUs were given a stern message that they either invest their huge surplus or pay it back as special dividend to the exchequer.
"Drawing attention to the large surpluses of CPSEs, the Prime Minister asked them to use that surplus for their own benefits and benefit of the economy. They should use it for driving investment, growth and jobs. Investing such surplus would help in reigniting growth impluses....," a statement from the Prime Minister's Office said.
The Prime Minister said the country should achieve a growth level of 8-8.5 percent regardless of what happens in the world economy. "We must learn to swim and swim fast enough, whatever be the circumstances," Singh said.
Briefing reporters about the meeting Heavy Industries and Public Enterprises Minister Praful Patel said: "Central public sector enterprises have large investible surpluses. In fact, there are more than Rs 2.50 lakh crore investible surpluses with them. The government would like them to grow and invest in their development plan.
"If the PSUs do not deploy the investible surpluses in their own growth and expansion, that money should not lie idle and it must be paid back to the government by way of special dividend."
Heads of 25 PSUs, including the cash-rich ONGC, Coal India, BHEL, NTPC, SAIL, NMDC, attended the meeting.
Patel said a committee of secretaries will be set up to look into the issues of PSUs, like autonomy and regulatory clearances, besides investment of surplus funds. It will be headed by Cabinet Secretary Ajit Kumar Seth.
The meeting comes in the wake of the government finding it hard to meet the fiscal deficit target of 5.1 percent of the GDP for the current fiscal.
The Prime Mister said, "Even if the international demand is not there, domestic demand should drive the investment and our endeavours."
CPSEs contribute over 6 percent of the country's GDP, and their profits are at a record level of Rs 1,00,000 crore.
Singh said there is a need for improving coordination in expediting project clearances and for generating an appropriate long term vision.
He asked CPSEs to focus on increasing the efficiency of operations, aim for achieving world-class competencies, the need to commit to innovations in technology, human resources and creating a culture of optimism.
He asked the Ministry of Heavy Industry & Public Enterprises and the Department of Public Enterprises to work with the Finance Ministry, Planning Commission and the National Manufacturing Competitiveness Council towards addressing these issues.
"We are a government determined to overcome difficulties in the spirit of national enterprise," he added.
Meanwhile Patel said, "Many of the CPSEs had the issues, which are larger issues of environment and other regulatory clearances, including oil subsidies and these issues will be addressed."
"CPSEs submitted that multilateral checks and balances in case of CPSEs are coming in the way of decision making and in turn resulting into sub-optimal performance," said U D Choubey, Director General, SCOPE.
According to the Department of Public Enterprises survey, during 2010-11, 248 CPSEs touched an all time high investment of more than Rs 6.66 lakh crore.
Total turnover of all PSUs went up by 18.3 percent to Rs 14.7 lakh crore in the 2010-11 fiscal.
Market capitalisation of 45 listed CPSEs was about Rs 15.6 lakh crore, which constituted about 22 percent of total market capitalisation of the BSE as on March 31, 2011.
Coal India had cash balance of Rs 58,202 crore in 2011-12, while NMDC had Rs 20,264 crore, NTPC (Rs 16,146 crore) and SAIL (Rs 6,415 crore).