Global giants or local pygmies? Going back on the promise made six years ago, the Government has tightened its grip on Navratnas, India’s premium PSUs. Instead of granting more autonomy, the Department of Public Expenditure (DPE) has issued a memorandum which robs them of their independence to enter into a joint venture or, for that matter, acquire new businesses.‘‘The Central Government public enterprises must take prior approval of the Government in regard to merger with and/or acquisition of any other business entities or major business activities and should not take decisions at (sic) their own,’’ says the DPE directive, dated February 11.‘‘This would be applicable to all the Central PSUs irrespective of their financial status or Navratna/ Mini-ratna status. Decisions on merger and/or acquisitions should not be interpreted as though such powers are within the autonomy given to the Navratna/Mini-ratnas under the guidelines issued by the government,’’ it clarifies.Heads of some of the Navratnas were clueless about the reasons that prompted the government’s about-turn. The signatory to the memorandum, DPE Joint Director S Banerjee, was not available for comments.The Navratna are: Bharat Heavy Electricals Limited, Bharat Petroleum Corporation Limited, GAIL (India) Limited, Hindustan Petroleum Corporation Limited, Indian Oil Corporation, Mahanagar Telephone Nigam Limited, National Thermal Power Corporation, Oil & Natural Gas Corporation and Steel Authority of India Limited. However, unlike the 1997 order, which floated the Navratnas with comparative advantages and gave them enhanced autonomy and delegated powers, the DPE memo does not have a Cabinet approval. Neither is it in line with the May 14, 2002 instructions of the Standing Committee (73rd report) that ‘‘greater financial, operational and managerial autonomy should be given to the Navratna/Mini-ratna public sector enterprises so as to enable them to take independent decisions.’’The committee was of the opinion that the grant of Navratna and Mini-ratna status should not be a one-time affair and should be reviewed periodically to include or exclude the PSUs.Mini-ratna status is given to PSUs that earn profits continuously for the last three years, have positive net worth, do not seek budgetary support or guarantees from the Government and have not defaulted in the repayment of loans their 1999 manifestoes, almost all major political parties, and the ruling National Democratic Alliance, promised to grant more autonomy to public sector undertakings.
