Prime Minister Manmohan Singh on Thursday said the government is committed to give more flexibility and autonomy to central public sector enterprises (CPSEs), but wrangling between administrative ministries is delaying the creation of a new set of PSUs with more autonomy than the Navaratnas?the Maharatnas.
The ministry of heavy industries and public enterprises’ 100-day agenda promised to form guidelines for creation of Maharatna PSUs, but ministries’ eagerness to see their own PSUs in the new category has forced the Cabinet to refer the draft guidelines to a Committee of Secretaries (CoS) under Cabinet secretary KM Chandrasekhar. The panel has to submit its recommendations by November.
?The Cabinet thought the draft should be further discussed among various ministries. So it referred the draft to the CoS, giving it two-month time to suggest the necessary changes,? a senior official in the ministry of heavy industry and public enterprises told FE .
According to the draft selection criteria, a Navratna CPSE should be a listed company with international operations. It should have earned average annual turnover of at least Rs 25,000 crore, average net worth of Rs 15,000 crore and average net profit after tax of Rs 5,000 crore in the previous three years.
The Maharatna firms would be allowed to invest a maximum of Rs 5,000 crore in a joint venture provided its overall investment in such ventures is not more than 50% of its total net worth. At present, a Navratna firm can invest Rs 1,000 crore in a joint venture, provided its total investment in all partnerships does not exceed 30% of its net worth.
In July, the department of public enterprises had asked around 11 ministries, including the ministries of power, oil & gas and steel, to give their suggestions on what should be the key requirements for selection of Maharatna firms. ?The suggestions had come in time and the draft note was floated for Cabinet discussion in time. But because of the disagreement between various ministries, it could not be discussed within the required time,? the official said.
The country has 18 Navratna CPSEs. However, the official said under the present guidelines, only around six firms including Oil & Natural Gas Corporation (ONGC), Steel Authority of India and Indian Oil Corporation would qualify for the Maharatna status.
