Chidambaram to PSUs: Invest or lose surplus cash
"We have already put (PSUs) on notice, no one will be allowed to fall short of (the) announced intention to invest... If they have not invested and they still have surplus cash, they have been told to invest...the principle is use it or lose it," he said.
At the beginning of the financial year, each central PSUs had committed to invest certain amount.
Chidambaram said the performance of CMDs will be measured, among other things, on how much their company has invested in terms of the declared intention.
At present, about 25 central PSUs, including blue chip companies like ONGC, GAIL, NTPC, SAIL, and BHEL have surplus funds worth Rs 2.5 lakh crore.
It is possible that PSUs failing to invest their surplus cash would be required to declare special dividends benefiting the government.
Chidambaram said the performance of PSUs on investment front will be reviewed in January.
Stressing that investment is key to growth, he said there is reluctance among industry to invest because they perceive a number of hurdles to investment and also do not see the economic situation very "propitious or conducive".
"I think some steps we took in September has broken this wave of fear but some part of it is still there," he said, adding the real work is to get the economy going and get the engine of growth started again.
"The answer is to spur investment. Investment is the key to growth. We have to now get down to detail. Get each PSU, each sector, each business house, why are you not investing... invest," he said.
The Finance Minister said the government is also talking to individual business houses to encourage them to invest. "...we are talking to individual business houses and goading them to invest. They all are sitting on piles of cash," he said.
Besides, the government is also looking at all sectors to remove hindrances to investment.
In the backdrop of recent reform measures, Chidambaram said the investment engine has come to life but its still not running at a full speed.
"Once we get the investment engine going... the results will begin to happen next year," he said, adding some industries like automobiles and housing have perked up a bit, but the consumer durables and non-durables haven't.
"So I hope the engine will start...moving forward. And then I think investment will pick up. Once investment picks up, I am sure we get back to the high growth," he added.
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