Investment board may loosen grip on rich PSUs

Move aimed at speeding up expansion programmes of profit-making PSUs.

Profit-making public sector units may no longer need a prior approval of the Public Investment Board (PIB) for projects of Rs 100 crore and above. The need is being done away with in order to speed up expansion programmes of profit-making PSUs.

Sources said the finance ministry and the Planning Commission have been asked by the Prime Minister's Office to finalise the revised guidelines for this purpose.

"Such a step has been taken so that the government can enable PSUs to compete in the international market," official sources said. The requirement of not seeking a PIB clearance will, however, be subject to fulfillment of certain parameters by the PSUs.

Officials said the waiver would be restricted to those PSUs and their projects which claim no budgetary support for a project or for the company itself.

Another condition being imposed is that the facility will be only for PSUs that do not need a central government guarantee except for multi-lateral loans.

The condition will be relaxed for PSUs whose projects are approved by leading financial institutions that fund their projects. "If a PSU meets the conditions, it will be granted an in-principle approval," the official said.

The officials said the matter was discussed at the PMO after which relevant departments were asked to finalise guidelines.

The PIB considers investment proposals of public-sector undertakings. At present, all PSUs have to obtain PIB clearance for carrying out projects of Rs 100 crore or more.