Public sector investment will be put on the fast track in the coming Budget in order to spur economic growth. Senior government officials indicated that this would be the chosen strategy to raise public investment without straining the fisc.

"The investment plans of the cash-rich units in the public sector will be put on the fast track. They will be encouraged to do their proposed investments quickly," finance ministry sources said.

The common minimum programme of the United Progressive Alliance had pledged to devolve full managerial and commercial autonomy to successful, profitable PSUs operating in a competitive environment.

If the Centre is able to translate its plans into action, PSUs can hope to get faster government approval for their investment proposals, which languish with the administrative ministries before going for Cabinet approval.

"We are at times unable to take advantage of the market situation due to delays involved in clearing projects," a navratna PSU chief said. The delays often result in the PSUs being unable to meet their investment targets for the year.

For instance, ONGC had sent five proposals to the government for clearance during the last year but two crucial decisions involving acquisition of Cairn Energy's stake in exploration blocks in the Gulf of Cambay and K-G basin and laying a 1,400 km pipeline in Sudan for evacuation of oil and gas are still awaiting government approval.

The finance ministry also holds the view that there is sufficient liquidity in the market and the public sector investments would not crowd out private sector investments. "In fact, the increased capital expenditure will crowd in private investment," the official said.

Bankers have said the navratna PSUs were hardly tapping them for funds as they were able to raise foreign debt at low interest rates.

For instance, foreign currency debt accounted for 52 per cent of IOC's loan portfolio.

Several PSUs have drawn up sizeable investment plans cutting across industries like oil & gas, power, engineering and steel. The total investment by central public sector undertakings during the Tenth Five Year Plan (2002-07) has been put at Rs 515,556 crore (Rs 5,155.56 billion).

Out of this, Rs 174,456.6 crore (Rs 1,744.566 billion) was earmarked for the first two years of the Plan, 2002-03 and 2003-04. Thus, investments totalling Rs 341,099.4 crore (Rs 3,410.994 billion) could potentially be speeded up in the budget.

The official also said that meeting would be held with leading corporates and business houses of the country to know their investment plans and the assistance they expect in making these investments.