Policy for Acquisition of Raw Material Assets abroad by Central Public Sector Enterprises (CPSEs) approved
The Cabinet today approved the policy for acquisition of raw material assets abroad by Central Public Sector Enterprises (CPSEs).
The main features of the policy are as under:
The following will be applicable to CPSEs in Agriculture, Mining, Manufacturing and Electricity sectors having a three year record of making net profits.
CPSEs will examine proposals, undertake due diligence and obtain approval of Board of Directors in a transparent manner.
Powers delegated to the boards of Maharatna and Navratna proposed will be enhanced and enhanced powers available only for acquisition of raw material assets abroad.
Coordinating Committee of Secretaries (CCoS) headed by the Cabinet Secretary proposed to be constituted. Proposals (i) where the administrative Ministry/CPSE requests for a coordinated view and (ii) involve Government funds to be put up before the CCoS.
CCoS will facilitate quick and coordinated decision making, coordinate grant of concessional credit to foreign enterprise/Government, recommend Government funding and decide about the nature of the Government funding on case to case basis. The CCoS to be serviced by the Department of Public Enterprises (DPE).
CPSE/Ministry will submit proposals to the DPE which will convene a meeting of the CCoS. The CPSE/Ministry to nominate a nodal officer. Recommendations of CCoS will be placed before CCEA by the DPE.
Existing Empowered Committee of Secretaries (ECS) mechanisms shall continue to function. Ministries presently not having ECS proposed will be authorized to have an appropriate ECS mechanism.
The Ministry of External Affairs and its Missions abroad will be associated right from the beginning of the process.
The Government to, in due course, will consider constituting a dedicated, Sovereign Wealth Fund.
The approval of the policy for acquisition of raw material assets abroad by CPSEs is expected to significantly enhance the capabilities of CPSEs to acquire raw material assets abroad and thus protect long term economic interests of the country.
Background
The availability of adequate quantities of raw materials is a pre-requisite not only for the growth of the manufacturing sector in particular and the economy as a whole, but also from a strategic perspective. Some countries have already taken the lead in acquiring sources of raw material assets globally. The acquisition of raw material abroad will also help in improving the energy security of the country. The matter requires a timely response before global raw material assets are no longer available, or are available at exorbitant prices.
It was, therefore, decided that in the long term interests of the country, a policy statement in clear terms needed to be pronounced to convey to all concerned the commitment of the Government to take all necessary measures towards acquisition of raw material assets abroad by CPSEs.
This policy emanates from the recommendations of National Manufacturing Competitive Council and wide inter-ministerial consultations.
The Cabinet today approved the policy for acquisition of raw material assets abroad by Central Public Sector Enterprises (CPSEs).
The main features of the policy are as under:
The following will be applicable to CPSEs in Agriculture, Mining, Manufacturing and Electricity sectors having a three year record of making net profits.
CPSEs will examine proposals, undertake due diligence and obtain approval of Board of Directors in a transparent manner.
Powers delegated to the boards of Maharatna and Navratna proposed will be enhanced and enhanced powers available only for acquisition of raw material assets abroad.
Coordinating Committee of Secretaries (CCoS) headed by the Cabinet Secretary proposed to be constituted. Proposals (i) where the administrative Ministry/CPSE requests for a coordinated view and (ii) involve Government funds to be put up before the CCoS.
CCoS will facilitate quick and coordinated decision making, coordinate grant of concessional credit to foreign enterprise/Government, recommend Government funding and decide about the nature of the Government funding on case to case basis. The CCoS to be serviced by the Department of Public Enterprises (DPE).
CPSE/Ministry will submit proposals to the DPE which will convene a meeting of the CCoS. The CPSE/Ministry to nominate a nodal officer. Recommendations of CCoS will be placed before CCEA by the DPE.
Existing Empowered Committee of Secretaries (ECS) mechanisms shall continue to function. Ministries presently not having ECS proposed will be authorized to have an appropriate ECS mechanism.
The Ministry of External Affairs and its Missions abroad will be associated right from the beginning of the process.
The Government to, in due course, will consider constituting a dedicated, Sovereign Wealth Fund.
The approval of the policy for acquisition of raw material assets abroad by CPSEs is expected to significantly enhance the capabilities of CPSEs to acquire raw material assets abroad and thus protect long term economic interests of the country.
Background
The availability of adequate quantities of raw materials is a pre-requisite not only for the growth of the manufacturing sector in particular and the economy as a whole, but also from a strategic perspective. Some countries have already taken the lead in acquiring sources of raw material assets globally. The acquisition of raw material abroad will also help in improving the energy security of the country. The matter requires a timely response before global raw material assets are no longer available, or are available at exorbitant prices.
It was, therefore, decided that in the long term interests of the country, a policy statement in clear terms needed to be pronounced to convey to all concerned the commitment of the Government to take all necessary measures towards acquisition of raw material assets abroad by CPSEs.
This policy emanates from the recommendations of National Manufacturing Competitive Council and wide inter-ministerial consultations.
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