With the business environment changing fast, the government is conducting a review of its guidelines for central public sector enterprises (CPSEs) in key areas like corporate governance, the memorandum of understanding system and corporate social responsibility (CSR).
It may also revise upwards the threshold for a PSU board to take investment decisions independently. Presently, the boards of navratna and maharatna companies can approve investment of up to R1,000 crore and R5,000 crore, respectively, for joint ventures and merger and acquisition deals without having to obtain the Cabinet?s nod.
?We are doing a review of the guidelines because the business environment is changing very fast,? said OP Rawat, secretary, department of public enterprises (DPE).
Rawat added: ?Our goal is to align guidelines in such a way as to facilitate CPSEs? plans to grow, transform and sustain in the current business environment.?
Former DPE secretary Bhaskar Chatterjee welcomed the move, saying: ?Stock-taking of existing guidelines is a good thing.?
While the government remains committed to maintain at least a 51% shareholding and managerial control in profitable CPSEs, it is also encouraging such unlisted companies to seek listing at stock exchanges through initial public offerings.
The idea is that listing will help bring higher levels of public scrutiny of CPSEs? functioning and improve their performance. Besides, it will also help the government?s disinvestment programme and shore up revenue when budget deficits are widening.
Many CPSEs have also emerged as global players and their boards need matching financial autonomy to take decisions relating to M&As. The government has already delegated enhanced financial autonomy to CPSEs through navratna and maharatna status.
CSR guidelines are also likely to be modified to make it easier for CPSEs to undertake CSR work, sources said.
