Could downgrade 'ratnas' that don't perform: DPE chief

State-run companies should not take their ratings for granted and their performance should be reviewed periodically, says the Department of Public Enterprises, the nodal agency for all the 246 central public sector companies. The department wants maharatna status for Bharat Heavy Electricals and GAIL even though the two do not qualify yet. This would be a one-time exception, though, says DPE secretary Bhaskar Chatterjee. The department is also helping companies gain more financial autonomy and acquire assets and technology abroad says Chatterjee. Excerpts:


Are you easing the norms for getting maharatna status?

We are keen that Bhel and GAIL should acquire maharatna status. They are falling short only on the parameter of profit after taxes (PAT) by Rs 500 crore each. In the memoranda of understanding targets for FY12, both are slated to cross this PAT threshold. The choice is do we wait for 18 months or give them the chance now.


Will this exception become the norm then?


No, we are very clear that only these two companies can be a one-time exception. Besides, their mahartana status will finally be subject to the FY12 results. There is aggressive competition to acquire natural resources and countries such as China are already moving ahead. We need to empower our companies so they too can bid aggressively, take on competition and grow.


Are you looking at giving more financial autonomy to maharatnas so that they can acquire assets abroad?


A cabinet note has been prepared which seeks to create a fast-track committee for clearing such proposals from PSUs. It has been refereed to a committee of secretaries. Our initial idea was for assets up to Rs 25,000 crore. But let them take a view on that. Besides, we are facilitating PSUs to work in three new areas: CSR (corporate social responsibility), R&D and sustainable development. This will ensure their overall growth.


Why is DPE pushing Airport Authority of India's case for navratna?


It's not about Airport Authority of India alone. There are some companies, specially in the services sector, which fulfil all the criteria of a navratna except for a minor clause here and there. In the case of AAI, the ratio of cost of production to manpower does not meet norms. But AAI cannot reduce its staff as most are air traffic controllers, who are crucial for airport functioning. We have moved a proposal to the apex committee, which has advised that don't treat one or two exception and there should be a separate policy prescription. We are looking at that.


Some companies take these navratna or miniratna status for granted. Are you looking at stricter performance evaluation?


Yes, this suggestion did came up during the ministers' meeting with PSU chiefs. We are thinking of, say, evaluating the performance every three years and comparing whether there has been an improvement or not. If there has been a constant decline then that PSU can be downgraded. I believe that the fear of losing should act as an incentive to perform well. We will like to work further on this suggestion.


What about sick PSUs. Will finally the government decide to sell them or will they continue to be a burden?


One should understand that there are three types of sick companies. The incipiently sick, which can be revived through BRPSE plans. Second are those where the action plan is still being worked out. It's the terminally sick PSUs where nothing can be done. However, the finality of closure is a function of political will.