Dear Comrades,
The
Cabinet Committee on Economic Affairs today approved the following:
(i)
The disinvestment
proceeds with effect from the fiscal year 2013-14 will be credited to the
existing “public account” under the head National Investment Fund (NIF), and
they would remain there until withdrawn/invested for the approved purposes.
(ii)
The NIF will be used
for the following purposes:
(a) Subscribing to the shares being issued by the Central Public
Sector Enterprise (CPSE) including Public Sector Banks (PSBs) and Public Sector
Insurance Companies, on rights basis so as to ensure that 51 percent ownership
of the Government is not diluted.
(b) Preferential allotment of shares of the CPSE to promoters
as per Securities and Exchange Board of India SEBI (Issue of Capital and
Disclosure Requirements) Regulations, 2009 so that Government shareholding does
not go down below 51 percent, in all cases where the CPSE is going to raise
fresh equity to meet its capex programme.
(c) Recapitaliztion of PSBs and Public Sector Insurance Companies.
(iii)
Fund Managers
presently managing the NIF will stand discharged of their responsibility from
the date the funds and the interest income are transferred to the fund.
The NIF was
constituted by the Cabinet Committee on Economic Affairs on 27th January 2005.
The objectives structure and administrative arrangements, investment strategy
were notified in November, 2005, and the NIF started functioning from October, 2007.
As on 31st August 2012 the corpus in the NIF consisted of Rs.1814.45
crore, comprising the disinvestment proceeds of Power
Grid Corporation of India and the Rural Electrification Corporation Limited
done during 2007-08. This corpus is presently invested through three Public
Sector fund managers (SBI, LIC and UTI Mutual Funds).
****
SC/SK(Release ID :91624) PIB
