Big guns in PSUs to get 'MahaNavaratna' tag

The government may bestow the coveted 'MahaNavaratna' tag on oil majors ONGC and IOC, telecom firm BSNL, power utility NTPC, steel-maker SAIL and Coal India to given them greater autonomy and powers to take decisions to invest up to Rs 5,000 crore.     

A panel of bureaucrats headed by Cabinet Secretary K M Chandrashekhar would decide on upgrading some of the Navaratna public sector firms to 'MahaNavaratna', a senior official said.     

The 'MahaNavaratna' tag would allow the state-run firms to make investment decisions of up to Rs 5,000 crore without having to go to the government for approval. Currently, the boards of Navaratna PSUs have the powers to decide on investments of up to Rs 1,000 crore, beyond which they have to go to the Public Investment Board for approval.     

The new tag will give them greater autonomy to forge joint ventures, float overseas companies and the freedom to decide on mergers and acquisitions of a particular size.     

The official said the Department of Public Enterprises has sent a strict qualifying criterion of turnover, net worth, profitability and overseas presence to qualify for the MahaNavaratna tag.     

Only six PSUs may meet the qualifying norm of Rs 30,000 crore or more turnover and at least Rs 5,000 crore net profit in the past three years besides an average net worth of Rs 15,000 crore, he added.

The other members of the panel chaired by the Cabinet Secretary would include the secretaries to the Department of Public Enterprises, Expenditure and administrative ministries concerned and a representative of the Planning Commission, the official said.     
The only PSUs which may be eligible for the new tag would be Oil and Natural Gas Corp (ONGC), Indian Oil Corp (IOC), NTPC, Bharat Sanchar Nigam (BSNL), Steel Authority of India Ltd (SAIL) and Coal India.     

ONGC had clocked a net profit of Rs 16,126 crore in 2008-09, while in the preceding years the profit was Rs 16,701.65 crore and Rs 15,642.92 crore. The net sales of ONGC in 2008-09 were Rs 63,949 crore. It was Rs 59,848.48 crore in 2007-08 and Rs 56,641.42 crore in 2006-07.     

While IOC registered a net profit of Rs 6,962.58 crore in 2007-08, in the two preceding years the profit was Rs 7,499.47 crore and Rs 4,915.12 crore, respectively. The standalone total income of the company rose to Rs 3,09,087.59 crore during FY 2009, from Rs 2,49,169.16 crore in the previous fiscal.

Similarly, NTPC recorded a net profit of Rs 7,827.4 crore in 2008-09, Rs 3,009.39 crore in 2007-08 and Rs 7,805.87 crore in 2006-07. The company's turnover in 2008-09 was Rs 42,182 crore, while in the preceding years it was Rs 37,050.13 crore and Rs 32,595.27 crore.

BSNL's net profit in 2007-08 stood at Rs 3,009.39 crore while in the preceding years it was Rs 7,805.87 crore and Rs 8,939.69 crore. The company's net sales in 2007-08 were Rs 32,359.53 crore, while in 2006-07 they were Rs 34,616.21 crore and in 2005-06 Rs 36,138.94 crore.     

Department of Public Sector Enterprises Secretary R Bandyopadhyay has said that the Ministry of Heavy Industries has circulated a note for creating a new category, Mahanavaratna, for profit-making state-owned firms to grant them more autonomy than what navaratna public sector units have.     

"[W]e have already prepared a Cabinet note. We are inviting comments, opinions, suggestions of various ministries," Bandyopadhyay said.     

The ministry, in its 100-day agenda, has proposed to classify mega public sector units under a new category 'Mahanavaratna'.     

Heavy Industry Minister Vilasrao Deshmukh has said that the policy on 'Mahanavaratna' would be formulated within 100 days.     

As of now, the boards of 18 Navaratna public enterprises have been delegated enhanced powers in the areas of investments, and mergers and acquisitions.