Public sector enterprises aiming to get a 'navratna' status may henceforth have to meet a minimum turnover criterion as also a business strategy that involves global reach.
Seven companies have been shortlisted for this status, including BSNL, Hindustan Aeronautics, National Aluminium Company, Power Finance Corporation, Rural Electrification Corporation, Power Grid Corporation and the National Hydroelectric Power Corporation.
The ministry of heavy industries and public enterprises, which sets parameters for 'navratna' aspirants, is inclined to include turnover as a criterion to allow only companies with a minimum size to qualify, said an official.
The ministry has veered towards using turnover as a criterion after a relatively small public sector company made the grade in an earlier exercise to choose companies that qualified for the 'navratna'.
In addition to fixing an explicit criterion linked to turnover, the ministry plans an 'unwritten' criterion where the global context of an aspirant's business strategy would be considered.
'Navratna' status accords additional financial and managerial autonomy to a public sector company. The concept needs to be seen in the backdrop of a company's global plans because that is where the autonomy would be critical, said the official.
At present, the financial parameters for 'navratna' status are primarily linked to a company's profitability, such as the ratio of net profit to net worth. The rating received by an aspirant in the memorandum of understanding drawn up by the government is also a parameter for grant of the status.
The guidelines relating to criteria for granting of the 'navratna' to more public sector companies was brought into focus after Santosh Mohan Deb, minister of heavy industries and public enterprise, told Parliament in the Budget session that seven more companies were being considered for grant of the status.
An apex committee headed by the cabinet secretary decides on the list of new entrants to the navratna club -- currently there are nine companies in the club. If new criteria are suggested by the ministry, they would have to meet with the apex committee's approval.
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