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The Government’s decision to allow public sector companies to park up to 30 per cent of their surplus funds in mutual funds is a welcome development.

As pointed out in the editorial “Mutually beneficial” (Business Line, July 28), restricting it to public sector mutual funds — subjected to review after one year — is probably done to satisfy the Left allian ce. But still, the Left parties ask: “Why PSU investment in MFs?” (Business Line, July 28).

In fact, they could have been allowed to invest directly in stocks. PF funds also suffer from the same drawback.

If PSUs such as LIC could profit out of investment in the stock market, why cannot others? Why should they be deprived of the benefits?

The solution lies in reducing government intervention in PSU management and giving them more autonomy.

A. Jacob Sahayam Thiruvananthapuram

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