The government is mulling a new corporation, to be set up by pooling the funds from cash-rich public sector enterprises, for acquiring overseas assets as well as raising money abroad.

The proposal comes at a time when India is looking to attract more overseas investments into infrastructure to boost economic growth, which has turned sluggish in recent times.

“The Finance Ministry has circulated a concept paper asking certain cash rich PSUs to pool in their cash reserves and utilise that to acquire assets abroad,” a government official said.

“The corporation will also be mandated to access foreign market to raise money by issuing bonds or any instrument which give better returns,” he said, adding that it will help garner funds for infrastructure development.

The Finance Ministry has circulated the concept note to administrative ministries saying that the new corporation could also assist PSUs in foreign acquisition of assets.

Priority would be for acquiring assets in oil and gas and fertiliser segments.

“The PSUs will have to understand that this will be a structured model for overseas acquisitions and fund raising. They have to take a call whether they want to go solo and create a overseas subsidiary themselves or set up the corporation,” the official said.

He added that there was a need for PSUs to look out for overseas assets as the availability of domestic resources is limited.

Impacted by domestic as well as international factors, economic growth touched 5 per cent in the last financial year, the lowest rate in a decade.

Meanwhile, the official ruled out the possibility of the government setting up a Sovereign Wealth Fund (SWF).

“SWFs can be formed by those government which have a positive current account balance and fiscal balance. We will need time before we can form such a fund,” the official added.

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