alysis on Alternate Investment options for PSU's Is the orthodox govt. ready to trade-off risk for profitability amidst strict guidelines- An inside study_

Abstract

India is a developing country and the growth of the economy is only possible through large scale investment into manufacturing and production sector which will ensure not only self-dependency but will also reduce the amounts of our imports and current and capital account deficits. The scenario when the corporate sector is involved in investment differs as it is much more concerned about the liquidity of their funds rather than returns because of their cash requirements and necessities within a very short span of time. Despite many lucrative options available in the market providing attractive liquidity and return options, Public Sector Companies which are highly profit making don’t tend to utilize all of the options because of the stereotype guidelines set by the government regarding their investment of surplus cash. These investments cannot deviate even an inch from the guidelines set forward by the Department of Public Sector Enterprises (DPSE) which is a strict regulator of all the public sector undertakings directly monitored by the Ministry of Heavy Industries and Resources. Thus, this study was undertaken to explore alternatives for the investment of surplus funds keeping well within the government guidelines and providing greater returns and liquidity at the same time.