PSUs stand to lose mini-ratna status

The government is planning to strip some public sector units of their mini-ratna status for failing to maintain stipulated benchmarks. The move comes even as the government is examining a proposal to enhance the power and autonomy of navratnas and mini-ratnas.

There is, however, good news for PSUs waiting to join the privileged list. The heavy industry ministry has identified four PSUs, including Bharat Sanchar Nigam Ltd, that may be accorded the navratna status.

Government sources said some PSUs had sought budgetary support from the government or were incurring losses and hence were likely to be removed from the mini-ratna list.

According to the norms, PSUs with mini-ratna status should be making profits consistently and be self-sufficient and not dependant on the government for budgetary support.

The government is also planning to redefine the term "navratna". According to officials, more firms will be accorded the privilege. At present, there are nine navratnas and 42 PSUs with mini-ratna status.

A meeting of the ad hoc expert group appointed to review the navratna and the mini-ratna schemes of 1997-98 for public sector companies is expected to be held next week.

The committee was formed to look into the issue of PSU autonomy by devolving more power to successful and profit-making companies. The heavy industry ministry has finalised its recommendations on enhancing financial and administrative autonomy to PSUs.

The ministry is of the view that the boards of navratnas and mini-ratnas should be given the power to decide on joint ventures and mergers and acquisitions. It has recommended that these powers be doubled from 15 per cent of their net worth to 30 per cent of their net worth.

The plan has been sent to the Cabinet secretariat. The expert group will study the plan before it is taken to the Cabinet for approval.