PSUs annual appraisal to add sectoral results
The government has decided to increase the weightage of sector-specific performance criterion while assessing annual performance of a public sector unit (PSU).
By Dheeraj Tiwari & Gunjan Pradhan Sinha, ET Bureau |
NEW DELHI: The government has decided to increase the weightage of sector-specific performance criterion while assessing annual performance of a public sector unit (PSU). The move aims at judging a company���s accomplishments vis-��-vis performance of the entire sector in the particular assessment year.
Currently, the PSU appraisal system provides for a 10% weightage to the sectoral criterion. The score is important for PSUs as their navratna and mini-ratna status is dependent on the number.
The proposed change is being made after a number of oil PSUs wrote to the department of public enterprises (DPE) that their performance dipped in the last two financial years due to unprecedented jump in global crude oil prices, a factor beyond their control, an official in the department said.
Their reaction came after DPE proposed to strip off navratna status of oil marketing companies Bharat Petroleum Corp and Hindustan Petroleum Corp due to their dismal performance. The proposal was, however, reviewed in the light of oil companies��� plea that they were not allowed to charge a market price for fuel, thereby taking a hit on their balance-sheets.
���By increasing the weightage of sector-specific criterion, we would be able to capture performance of a PSU vis-��-vis the sector. We have not decided the revised weightage,��� he added. Even now, the department changes the parameter on a case-to-case basis.
���Even in the existing system, weightage of sector-specific parameters could be altered after consultation with administrative ministries. However, this is not the rule,��� he said. Currently, the performance evaluation of PSUs is calculated on the Balanced Score Card that includes both financial and non-financial parameters having equal weight.
ADVERTISEMENT
The non-financial parameters are further divided into dynamic parameters (30%), enterprise-specific parameters (10%) and sector-specific parameters (10%). Based on the composite scores, the government decides whether a company can be upgraded as a navratna, mini-ratna or schedule A or B company.Download
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
