PSUs get more financial powers

In the first major exercise of empowering the central public sector enterprises since the formulation of the 'Navratna' scheme in 1997, the government on Monday doubled their capacity to invest in joint ventures and incur capital expenditure.

From now on, profit-making CPSEs falling under the 'Navratna' category will be able to incur up to Rs 1,000 crore (Rs 10 billion) capital expenditure without government nod.

In the case of top 'Miniratnas,' the limit for capital expenditure without government nod has been increased to Rs 500 crore (Rs 5 billion) or equal to their net worth, whichever is less, Information and Broadcasting Minister S Jaipal Reddy said after a meeting of the union cabinet.

For 'Miniratnas' in the second category, the limit has been increased to Rs 250 crore (Rs 2.5 billion) or 50 per cent of their net worth.

In case of other profit-making PSUs, the limit of capital investment without government nod has been increased to Rs 150 crore (Rs 1.5 billion) or 50 per cent of their net worth, which ever is less.

The 'Navratnas' and 'Miniratnas' will now be able to establish joint ventures with investment up to 15 per cent of their net worth in one project, subject to a limit of Rs 1,000 crore for Navratna, Rs 500 crore for Miniratna-I and Rs 250 crore in case of Miniratna-II.

In all, the CPSEs will be allowed to invest up to 30 per cent of their net worth in joint ventures and subsidiaries as against 15 per cent earlier.

The cabinet also gave its approval to empower boards of the PSUs to delegate powers of appointments, transfer and posting of below board level executives to a sub-committee in the company or to an executive.