Govt asks PSUs to invest surplus cash or pay special dividend

New Delhi, October 24: Faced with difficult government finances, Prime Minister Manmohan Singh on 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 per cent 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 per cent of the GDP for the current fiscal.