Cabinet nod to new material policy
New Delhi: Union cabinet today approved a new policy for acquisition of raw material assets abroad by central PSUs with a 3-year record of profit, vesting more powers with Maharatna and Navratna companies for such buy-outs.
"Today the Cabinet approved the policy for acquisition of raw material assets abroad by CPSEs. Availability of raw material is a prerequisite not only for the growth of the manufacturing sector alone, but for the economy as a whole," Information and Broadcasting Minister Ambika Soni told reporters after the meet.Heavy Industries and Public Enterprises Secretary S Sundareshan said the new policy will pave the way for Navratna firms to invest up to Rs 3,000 crore in such assets without government approval, as against the present limit of Rs 1,000 crore.
For Maharatna firms, the limit is Rs 5,000 crore, he said, adding that the policy will facilitate the acquisition of coal, iron ore and other assets abroad.
The policy will be applicable to central public sector enterprises (CPSEs) in the agriculture, mining, manufacturing and electricity sectors having a three-year record of net profits, Soni said. "Powers delegated to the boards of Maharatna and Navratna will be enhanced for such acquisitions," Soni said, adding that a Coordinating Committee of Secretaries (CCoS) headed by the Cabinet Secretary will be formed.
The CCoS will examine proposals involving investment beyond the prescribed limits for such acquisitions by CPSEs. The CCoS will facilitate quick and coordinated decision-making, coordinate the grant of concessional credit to foreign enterprises, recommend government funding and decide about the nature of such funding on a case-to-case basis, she added.