Mahanavratna status to wait for a year: DPE

NEW DELHI: The department of public enterprises (DPE) has decided to wait for a year before bestowing higher functional and financial autonomy to nine top performers among 18 navratna companies by carving out a new category of mahanavratnas.

The Planning Commission had recommended mahanavratna status to Bhel, Bharat Petroleum, Hindustan Aeronautics, Hindustan Petroleum, Indian Oil, NMDC, Power Grid Corporation, REC and SAIL.

Mahanavratna status would have given these companies freedom to make investments up to 50% of their net worth, the sum of its equity capital and reserves, while the investment cap on a single project would have gone up to 25% of their net worth. The tag will also have given them greater functional autonomy for forming joint ventures.

After deliberating on the proposal, the DPE decided to monitor the performance of these companies for another year before granting them the new tag and greater autonomy.

���We have been asked to prepare a report on enhancing the powers of these nine companies. After extensive deliberations we have decided that a decision can be taken only after monitoring the performance of these companies during the current slump. For the time being, 18 navratnas will continue to enjoy the same functional and financial powers though the tag will be changed to mahanavratnas,��� said a DPE official who asked not be named.

These nine companies had out performed their peers in the segment in terms of parameters such as year-on-year growth in net profit, total income and net worth in the financial year ended March 2008. Navratnas are allowed to set up joint ventures, alliances and foreign subsidiaries.

But the total investment by navratnas can���t exceed 30% of their net worth���the sum of its equity capital and reserves���or Rs 1,000 crore whichever is lesser. They are also prohibited from investing more than 15% of their net worth in a single project.