Just a third of navratnas make the maharatna grade

Of the 18 public sector undertakings that enjoy navratna status, only six will make it to the maharatna grade and enjoy greater financial autonomy. These are Bharat Petroleum, Hindustan Petroleum, Indian Oil, NTPC, ONGC and SAIL.

After discussing the selection criteria for maharatnas following complaints by some public sector undertaking (PSU), the Committee of Secretaries (CoS) has finally stuck to the criteria originally proposed — average annual turnover of Rs 25,000 crore, average net profits of Rs 5,000 crore and average net worth of Rs 15,000 crore over the past three years. Besides these, the PSUs should be listed with "a significant global presence and international operations".

Government sources said the committee has now submitted its recommendations to the heavy industries ministry. The ministry will soon take a proposal based on the recommendations to the Cabinet.

Maharatnas will have the autonomy to decide on investments in joint ventures and acquisitions up to Rs 5,000 crore. Navratnas have such flexibility for investments up to only Rs 1,000 crore. Even in case of maharatnas, mergers and acquisitions in India or abroad will be subject to a ceiling of 15 per cent of their net worth in one project. The overall ceiling for all such projects will be 30 per cent.

However, many PSUs including BHEL and NMDC are not too happy being left out. The other significant navratnas that will have to wait to be a maharatna include BHEL, MTNL, NMDC, Bharat Electronics, GAIL, Hindustan Aeronautics and Shipping Corporation of India.

An NMDC spokesperson said, "On the basis of performance and fundamentals of the company, NMDC deserves to be a maharatna." Many PSUs feel the government must consider financial ratios rather than absolute numbers while reviewing PSUs for the maharatna status.

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