Union Cabinet approved New Policy for acquisition of Overseas Raw Material Assets by CPSEs

All central public sector enterprises (CPSEs) were on 13 October 2011 elegated with more powers for acquisition of raw material assets abroad. The Union Cabinet approved a new policy for acquisition of overseas raw material assets which would be applicable to CPSEs in agriculture, mining, manufacturing and power sectors with a three year track record of making net profits.

With an intention to address the issue of acquisition of raw materials before global raw material assets were no longer available or were available at exorbitant prices, the government vested the CPSEs with the responsibility to acquire raw material assets abroad.

Maharatna and Navratna entities were vested with enhanced power to acquire raw material assets worth Rs.5000 crore and Rs.3000 crore respectively from Rs.1000 crore without having to consult the government.

The government also set up a Coordinating Committee of Secretaries (CCoS) under the Cabinet Secretary to expedite proposals which require approval of various ministries and involve government funds. The government maintained that it would consider constituting a dedicated Sovereign Wealth Fund to go with the new policy to protect the long-term economic interests of the country.