Finance minister Nirmala Sitharaman said the panel decided to extend the use of GST cess collections for compensating states beyond the previously agreed June 2022 timeframe
The new PSU will also look after production of space-based products and services developed by ISRO.
Groundwork for the small rocket with a satellite capacity of around 500 kg is underway.
The two satellites 90 percent transponders were to be leased to Devas Multimedia Ltd by ISRO's commercial arm Antrix Corporation.
TeamIndus could dropout of Google Lunar XPRIZE competition after ISRO denies them PSLV launch vehicle
Had TeamIndus even received the required funding, logistical and technical failures would have made it impossible for them to meet the 31 March deadline.
ISRO will schedule its next launch mission after a committee studies the cause of its recent failure.
ISRO PSLV-C38 mission: Here's all you need to know on the 31 satellites that India put into orbit today
This was the fortieth launch of the PSLV, one of the most reliable launch vehicles in the world, which has earned it the moniker of ISRO's workhorse rocket.
The CBI on Monday told a court here that it has got sanction to try three former ISRO officials.
Isro plans to launch a world record of 104 satellites on a single Polar Satellite Launch Vehicle on 15 February 2015 at 9:28 am.
The Isro PSLV launches are subsidised by the Indian Government, with investments in research and development.
Isro has scheduled the launch for 9:28 AM IST, provided the weather conditions are favorable.
2017 is expected to start with a big bang for ISRO as it would be aiming for a world record by putting into orbit 83 satellites on a single rocket.
Indian space agency ISRO is aiming for a world record by putting into orbit 83 satellites -- two Indian and 81 foreign -- on a single rocket in early 2017, a top official of Antrix Corporation said.
Isro will soon cross the launch of 100 foreign satellites, says official; number currently stands at 74
India will soon touch the magic figure of launching 100 foreign satellites, said a senior official of Isro.
On Tuesday India lost its arbitration case in an international tribunal against Bengaluru-based Devas Multimedia Private Ltd for cancelling its space/satellite contract with the government-owned Antrix Corporation, Devas said.
As per the agreement, Antrix was to provide 70 MHz of the scarce S-Band space segment to Devas for its digital multimedia services
India will launch 25 foreign satellites belonging to seven countries, with the USA topping the list in 2016-17, Rajya Sabha was informed on Thursday.
The Enforcement Directorate (ED) has registered a money laundering case to probe alleged Rs 578 -crore "wrongful" gain to private multimedia company Devas by Antrix, the commercial arm of ISRO.