The proposal to grant conditional Maharatna status to two PSUs - BHEL and GAIL - is expected to be taken up in the Cabinet by the end of next month, even though they do not meet the criteria.
The government is considering to grant an exception to enable the two state-run companies to exploit investment opportunities up to Rs 5,000 crore without the government approval.
While equipment firm BHEL and gas utility GAIL do not meet the financial parameters for the Maharatna status, they are expected to fulfil the criteria by the end of this fiscal.
"The Cabinet note has been circulated and we have asked for comments from other ministries...Hopefully, we can take the note by the end of August to the Cabinet," Secretary in the Department of Public Enterprises (DPE) Bhaskar Chatterjee told PTI.
Since, both these navratna firms are cash-rich and scouting for investment opportunities within and outside the country, they may be given the much sought-after status, with a rider that they would achieve the required financial objectives in this fiscal.
But, the ministry officials are saying that it would be a one-time relaxation for these firms and the Maharatna guidelines would not be diluted.
During 2010-11, BHEL reported a net profit of Rs 6,011 crore on a turnover of Rs 43,451 crore. The entity’s net worth last fiscal stood at Rs 20,119 crore. GAIL reported a net profit of about Rs 3,561 crore, turnover of about Rs 32,977 crore and a net worth of Rs 20,310 crore during the fiscal.
A company qualifying for the Maharatna status should have an average annual turnover of more than Rs 25,000 crore in the last three years, according to the guidelines.
Among others requisites, the PSU must also have a net worth of over Rs 15,000 crore and a net profit of above Rs 5,000 crore in the last three years.
On March 17 this year, the DPE had relaxed the norms for according the Maharatna status to PSUs. However, easing of norms was denotified within a month as it required the Cabinet approval.
Once a company gets the Maharatna status, its board would not be required to take the government’s permission for investments up to Rs 5,000 crore in a joint venture project or wholly-owned subsidiary. For the Navratna companies, the limit is Rs 1,000 crore.
