Press Information Bureau

Government of India

Ministry of Finance

18-May-2012 17:01 IST

Cross Holding Among Profitable PSUs

On 01st March, 2012, the Cabinet Committee on Economic Affairs decided to take the economic reforms forward and accordingly:

Provided Central Public Sector Enterprises (CPSEs) a third choice for investing their surplus cash in the shares of other CPSEs through Department of Disinvestment, in addition to bank deposits and/or mutual funds which were allowed by Department of Public Enterprises O.M. No. DPE/11/47/2006-Fin. Dated 31st August, 2007; and

(i) Enabled Department of Disinvestment to respond to the proposals of CPSEs, in case they decide to resort to buyback to restructure their capital base commensurate to the size of their operations on the pattern of private companies.

(ii) The above are only enabling provisions. The decisions are to be taken by the companies taking into consideration all aspects of the matter.

This information was given by the Minister of State for Finance, Shri S.S. Palanimanickam in written reply to a question in the Lok Sabha today.

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DSM/SS/SL

Cross-holding among state enterprises permitted as a sanctioned investment avenue, enabling buybacks via Disinvestment Department. CPSEs are authorized to invest surplus cash in shares of other CPSEs through the Department of Disinvestment alongside bank deposits and mutual funds; the Department may respond to CPSE buyback proposals to permit capital restructuring, while these measures are enabling and final decisions rest with the companies considering all aspects.