The Hindu : National : HAL likely to get `navratna' status

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Saturday, Dec 09, 2006
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HAL likely to get `navratna' status

Ravi Sharma

Bangalore: Hindustan Aeronautics Limited (HAL) is being "actively evaluated" by the Department of Public Enterprises (DPE) for `navratna' status, according to official sources. With an average composite score of over 60 (out of a total of 100) over the past three years, HAL stands second in the list of public sector undertakings (PSU), which are now being scrutinised and vying for the exalted "navratna" status.

Six guidelines

According to the sources, HAL has, over the past three years, successfully met all the six guidelines laid down by the DPE, namely, total manpower cost to total cost to production; profit before depreciation, interest and tax to capital employed; profit before interest and tax to turnover; earnings per share; and, inter-sectoral performances.

Along with HAL, the other PSUs that are also trying to attain "navratna" status are: Bharat Electronics Limited, Container Corporation of India, Housing and Urban Development Corporation Limited, Kudremukh Iron Ore Company Limited, National Aluminium Company Limited, National Fertilizers Limited, Power Finance Corporation and National Mineral Development Corporation.

For HAL, which is already a category I "miniratna," a "navratna" status would mean less Government controls and more financial autonomy. It will also allow it to be managed by an autonomous board.

HAL now has two Government directors, with the other six being independent directors.

HAL's status is to be scrutinised and evaluated later this month by the mandatory "Inter-Ministerial Committee," which is headed by the Chairman (Public Enterprises Selection Board) and has as members the Secretary (DPE), Member-Secretary of the Planning Commission, Secretary (Expenditure), Finance Secretary and the Secretary (Defence Production).

Once the committee makes its recommendations, HAL's application will be forwarded to an apex committee, headed by the Cabinet Secretary, which is the final evaluation authority.

Granting of "navratna" status goes back to 1997 when the Central Government, in a bid to turn large PSUs into global giants, granted nine select public sector enterprises enhanced financial and operational autonomy.

The present "navratnas" are: Bharat Heavy Electricals Limited, Bharat Petroleum Corporation Limited, Gas Authority of India Limited, Hindustan Petroleum Corporation Limited, Indian Oil Corporation Limited, Mahanagar Telephone Nigam Limited, National Thermal Power Corporation Limited, Oil and Natural Gas Corporation Limited and Steel Authority of India Limited.

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