Navratnas get a free hand for fresh ventures

NEW DELHI: NAVRATNAS and miniratnas will soon go places with the financial freedom given to them by the Cabinet on Monday to invest in new ventures. Bigwigs like ONGC, IOC and Bhel can spend up to Rs 1,000 crore on one project or 30% of their net worth for all projects put together through JVs and subsidiaries sans the hassle of seeking government approval.

This means that ONGC with has a net worth of Rs 60,721 crore can invest up to Rs 18,216 crore on oil and gas projects in India as well as abroad. This means that cash rich PSUs can go on a major expansion drive.

Miniratnas in category I like MMTC, Nalco, OIL can now spend up to Rs 500 crore and those in category II like HMT International, ITPO, Rites can invest up to Rs 250 crore without seeking permission from the concerned ministries.

In addition, the government has granted Miniratnas-I the freedom to spend up to Rs 500 crore or an amount equal to their net worth whichever is lower, as capital expenditure. On the other hand, Miniratnas-II can spend up to Rs 250 crore on capital with a cap of 50% of their net worth, whichever is lower.

Also the condition that Miniratnas and Navratnas will be stripped of their status if government guarantee is given has been altered. Government guarantee will be given in case it is required where an external donor is involved.

Boards will be allowed to delegate the powers related to human resource management of below board level executives, to sub-committees of the board or to other executives of the public sector enterprise. CMDs will also be empowered to approve business tours abroad.

The cabinet has also approved the setting up of a committee consisting of the secretaries of the department of public sector enterprises (DPE), Planning Commission, expenditure and the secretary of the administrative ministry concerned, to assist the apex committee on granting or divesting a PSU of the Navratna or Miniratna status.