PM to take a call on GIC, Temasek holding cap

Prime Minister Manmohan Singh is expected to take a call on operationalising a key provision in the year-old India-Singapore Comprehensive Economic Cooperation Agreement (CECA) that will enable Temasek and Government of Singapore Investment Corporation (GIC) to pick up to 10 per cent each in Indian companies.

The commerce and finance ministries have been unable to resolve the issue, and have left the final decision on the prime minister.

Senior government officials said Commerce Minister Kamal Nath had requested the PM to convene a meeting on the matter. A review meeting with the concerned ministries was held today.

Under the CECA, which was made effective in August 2005, India had agreed to formally recognise Temasek and GIC as "distinct entities."

They were to be allowed to own up to 10 per cent each of a listed Indian company, at par with other foreign institutional investors.

However, the RBI did not allow Temasek to raise its stake in ICICI Bank at the time of the latter's public issue last year.