Resources: Govt sets investment rules for PSUs

The Finance department has issued detailed guidelines on investment of surplus funds in state-run public sector undertakings, with which the Kumaraswamy government is looking to mobilise resources for expenditure, including farm loan waiver.

The guidelines apply to boards, corporations, authorities, local bodies, autonomous and semi-autonomous bodies functioning under the government. Now, their surplus funds, income, reserves and project funds or grants that are not required to be used immediately may be used for investment purposes.

The Finance department has stated that the surplus funds available in the state-run PSUs can be invested in state government securities, government-backed bonds, certificate of deposits, treasury bills, fixed deposits with any scheduled Indian commercial bank, debt-based public sector mutual funds and loans/deposits with state PSUs. “No investment shall be made in the instrument, the maturity period of which exceeds one year, including cases of residual maturity, from the date of investment. But this will not apply to investments in Karnataka Government Securities and Karnataka Government backed bonds,” a department circular says.

The investment guidelines assume significance given that the previous Siddaramaiah-led Congress government courted controversy after it asked the profit-making Mysore Minerals Limited to deposit its investible surplus funds of Rs 1,400 crore with the Karnataka State Cooperative Apex Bank Limited to fund the Rs 8,165 crore waiver of short-term farm loans.

The Finance department has also fixed Rs 25 lakh as the minimum availability of surplus funds for investment in fixed deposits.