Financial Daily from THE HINDU group of publications
Saturday, Jun 01, 2002
Financial Daily from THE HINDU group of publications Saturday, Jun 01, 2002 |
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PSU Industry & Economy - PSU Why should PSUs hold huge reserves: Shourie Our Bureau
NEW DELHI, May 31 THE Disinvestment Minister, Mr Arun Shourie, on Friday expressed his surprise over the huge accumulation of cash reserves in PSUs without having them deployed in profitable ventures in a fast-changing global technology. "The accumulation of such huge cash reserves is a comment on the management of the company when it is in the public sector. At a time when technology is fast changing, it surprises me no end that the reserves are allowed to accumulate without being invested in upgradation of technology and diversification into ventures to keep up with the competition," Mr Shourie said while briefing the media on the CCD meeting. While refusing to be drawn into a controversy on the Tatas' decision to utilise VSNL's cash reserves to invest in another group entity, Mr Shourie said his Ministry had taken a stand on the issue that would be communicated at the appropriate Government forum whenever called upon to do so. If the cash reserves are not utilised by the PSUs, it is better to distribute them between the Government and the other stakeholders before disinvestment. "This is a policy which the Government has been adopting on a case-to-case basis by looking at the needs of the particular entity which is being sold," the Minister said. According to Mr Pradip Baijal, Secretary, Ministry of Disinvestment, the Government had withdrawn cash reserves from Balco, VSNL, STC and MMTC. Mr Shourie also said the final decision on the proposal to float initial public offerings (IPOs) by national oil companies such as HPCL, BPCL and IOC rested with the Cabinet Committee on Disinvestment (CCD), chaired by the Prime Minister. "Please do not make this a contest between two Ministries. There are different points of view on disinvestment in oil companies and we are weighing several alternatives," Mr Shourie said.
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