The Hindu Business Line : Why PSU investment in MFs, ask Left parties

New Delhi, July 27 The Left parties today asked the Government to reveal the economic rationale behind the decision to allow blue chip public sector companies to invest up to 30 per cent of their available surplus funds in mutual funds since such investments are perceived to be high risk.

The topic may also come up in the Left-UPA meeting that usually takes place before a new session begins. However, no date has been finalised for such a meeting as of now.

The Cabinet Committee on Economic Affairs on Thursday allowed Navratna and Miniratna companies to invest 30 per cent of their available surplus funds in public sector equity mutual funds. This may result in an inflow of more than Rs 60,000 crore into the equities market.

The National Secretary of the CPI, Mr D. Raja, said: “We would want to ask the Government in Parliament to explain what could be the compelling economic rationale for allowing public sector funds to be invested in stock markets.”

The other issues on which the Left partners would work out a common strategy include import of wheat. India has been paying a high price for imported wheat, both last year as well as this year.

Mr Raja pointed out that another important issue to be discussed in the next session is the report submitted by the Standing Committee on Commerce headed by Dr Murli Manohar Joshi on revising the rules for land acquisition for special economic zones (SEZs). “The committee has stated that no SEZ should be approved unless the rules are amended.”

The parties would meet in the second week of August to work out a common strategy for the Parliament session, which begins from August 10.

The other issues to be raised in the next session include price rise, agricultural crisis, farmers’ distress and entry of foreign companies in retail sector.

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