The government has set up a group of ministers to recommend whether or not SAIL should continue to enjoy the navratna status. The GoM, headed by finance minister Yashwant Sinha, includes minister of heavy industries & public enterprises Manohar Joshi, steel minister BK Tripathy, power minister Suresh Prabhu, petroleum minister Ram Naik and chemicals & fertilisers minister SS Dhindsa.

In view of the unsatisfactory performance, a parliamentary standing committee had suggested review of the navratna status of SAIL. Following this, the department of public enterprises (DPE), recommended constitution of an inter-ministerial committee of secretaries under the cabinet secretary. The committee of secretaries, in turn, suggested the setting up of a GoM.

SAIL's navratna status has been under threat because of the heavy losses the company has been incurring. The steel giant had not shown any signs of recovery despite the government's approval for a financial package worth more than Rs 8,000 crore this year.

Another reason is that there are many PSUs which are making good profits, but do not enjoy the navratna or miniratna status. Navratna PSUs, which are not doing very well, are expected to make way for better-performing government companies.

It may be recalled that the government had identified 11 PSUs as `navratnas,' thus granting more autonomy to their board of directors. The 11 PSUs were: SAIL, IOC, ONGC, MTNL, VSNL, GAIL, NTPC, IPCL, BHEL, BPCL and HPCL.

The criteria for navratnas include size, performance, nature of activity, future prospects and the potential to develop into a world player. The boards of these PSUs were broad-based by the appointment of part-time non-official directors.

Subject to certain guidelines, these boards enjoy the freedom to make capital expenditure, enter into joint ventures, effect organisation restructuring, create and wind up posts below the board level, raise capital from the domestic and international markets, and establish financial joint ventures.

Later, the government also granted the `miniratna' status to 39 profit-making PSUs. These enterprises should have earned profits for continuously three years, have positive networth, do not seek budgetary support, have not sought guarantees from the government and have not defaulted in repayment of loans or interests to the government.