document.writeln("

Govt. unshackles PSUs further - greater investing and administrative autonomy
New Delhi: In a move towards giving more operational autonomy to public sector companies, the government on Monday doubled their capacity to make investments without seeking clearances from administrative ministries.

Profit-making companies that fall under the `navaratna' category can now invest up to Rs1,000 crores in joint ventures and incur capital expenditure, while `mini-ratna-I' and `mini-ratna-II' companies can go up to Rs500 crore and Rs250 crore respectively.

The boards of the PSUs can go ahead with mergers and acquisitions independently subject to these ceilings.

Disclosing this here on Monday after a meeting of the cabinet, information and broadcasting minister Jaipal Reddy said these decisions were taken as part of the commitments made under the national common minimum programme of the government.

Under the new guidelines for "empowerment of central public sector enterprises," the ceiling for investment by profit-making companies in joint ventures and subsidiaries has been increased from 15 per cent to 30 per cent of the PSU's net worth. In the case of the top 'mini-ratnas', the limit for capital expenditure without government approval has been increased to Rs500 crore or equal to their net worth, whichever is less.

For 'mini-ratnas' in the second category, the limit has been increased to Rs250 crore or 50 per cent of the net worth. In the case of other profit-making PSUs, the limit of capital investment without government clearance has been increased to Rs150 crore or 50 per cent of their net worth, whichever is less.

The boards of PSUs have now been empowered to delegate powers of appointments, transfer and posting of below board-level executives to a sub-committee in the company or to an executive.

They have also been given the powers to go ahead with mergers and acquisitions within the financial limits set for floating joint ventures and subsidiaries.

Besides, the cabinet approved the constitution of an inter-ministerial committee to assist the 'apex committee' for expeditious inclusion and deletion of CPSEs in the `navratna' category. It also decided to relax conditions related to government guarantee, wherever required.

Under the new guidelines, PSU chief executives can approve business tours abroad of functional directors up to five days in emergency cases under intimation to the administrative ministry.
Back to News Review index page  

Government. to provide fresh funds support for infrastructure projects
New Delhi: The government will offer financial support for infrastructure projects developed on public-private partnership basis. It has also announced that it will invest Rs1,718 crore to set up five centres for automotive testing and homologation across the country over the next six years.

The cabinet committee on economic affairs has approved the proposal to provide financial support for public-private partnerships (PPP) in building infrastructure with a suitable budgetary allocation to be made on a year-to-year basis.

The finance ministry will administer the plan scheme. Finance minister P Chidambaram pointed out that a provision of Rs1,500 crore was made in the budget for 2004-05 and a similar one has been proposed in the budget for 2005-06 under the 'assistance to infrastructure development' plan in the demand for grants of the department of economic affairs.

To be eligible for this fund, projects have to be executed jointly through public-private partnership. It would include development, financing, construction, maintenance and operation of the project by an entity with at least 51 per cent private equity.

Projects in transportation, roads and bridges, railways, airports and inland waterways, power, urban development, urban transport and water supply, sewage solid waste management and other physical infrastructure in urban areas, will qualify for funding. The infrastructure projects in special economic zones, international convention centres and other tourism proposals will also qualify for funding under this scheme.

The CCEA has also approved a proposal to set up the national automotive testing and research and development infrastructure project (NATRIP).

Full-fledged testing and homologation centres would be set up at Manesar in Haryana and at Kumbakonam near Chennai.
Back to News Review index page  

CCW approves revised offer on services at WTO
New Delhi: With the cabinet committee on WTO giving its go-ahead to the government's revised proposal, India will now offer liberal FDI limits in services sector, including telecom and finance, at the WTO talks.

The decision will give the commerce ministry the flexibility to move forward in WTO talks within the limits of its 'autonomous liberalisation'.

This implies that the ministry can offer up to 74 per cent on FDI in telecom, 49 per cent in banking, 26 per cent in insurance in its commitments at the WTO if it received good offer from developed nation in the outsourcing or movement of professionals.

The meeting of the cabinet committee on WTO (CCW), chaired by prime minister Manmohan Singh, directed the commerce ministry to make improved offers in sectors, over and above the initial offers already made in 2003.

While outsourcing comes under 'Mode I' of cross-border supply of services, movement of professionals comes under 'Mode 4', the two areas where India have offensive interests.

In services sector negotiations at WTO, a country can withdraw its offers if it does not in turn get satisfactory offers from other member countries. But after the final agreement member country cannot go back on the offer (the foreign investment limit) until it compensates for it.

India and most of the member countries keep some cushion in what investment limit they actually offer nationally and what they commit multilaterally at WTO.

The cabinet committee also directed the commerce ministry to submit the revised offers at WTO by this month end or August, an official release said.
Back to News Review index page  

CCEA clears integrated textile park scheme
New Delhi: The cabinet committee on economic affairs has approved the scheme for 25 'integrated textile parks' to be set up for exports across the country at an estimated cost of Rs625 crore, to be spread over this year and the next.

The scheme will create textile parks with an international infrastructure to house approximately 1,250 textile units. It will facilitate private investment of Rs18,500 crore into the sector and will help create five lakh jobs.

Each park will provide modern infrastructure and locate at least 50 textile units. The location of the projects will be identified after a study by a professional agency that will consider demand and potential. Projects will be need-based and the proposed parks will cover the weaving, knitting, processing and garmenting sectors.
Back to News Review index page