|
The Union Cabinet today approved the following proposals for enhancing the delegated powers of Navratna, Miniratna and other profit making Central Public Sector Enterprises (CPSEs):
a. Ceiling on investment to establish Joint Ventures and Subsidiaries by Navratna and Miniratna CPSEs may be enhanced to 15% of the net worth in one project limited to Rs.1000 crore in the case of Navratna, Rs.500 crore in the case of Miniratna-I and Rs.250 crore in the case of Miniratna-II. The overall ceiling to be increased from 15% to 30% of the net worth for all projects put together.
b. The condition relating to government guarantee would be relaxed wherever such guarantee is required by external donor agencies.
c. Delegation of power for merger and acquisition to Navratna and Miniratna CPSEs subject to stated conditions and financial ceilings as at (a) above.
d. Power to incur capital expenditure may be enhanced to Rs.500 crore or equal to net worth, whichever is lower, in the case of Miniratna-I; to Rs.250 crore or 50% of the net worth, whichever is lower, in the case of Miniratna-II; and Rs.150 crore or up to 50% of their net worth, whichever is lower, in the case of other profit making CPSEs.
e. The Boards may be empowered to delegate the powers relating to HRM (appointments, transfer, posting, etc.) of below Board level executives to sub-committees of Board or to executives of the PSE, as will be decided by the Board of the concerned PSE.
f. CMD of the concerned PSE will be empowered to approve business tours abroad (other than study tours, seminars etc.) of functional directors up to five days’ duration in emergency under intimation to the administrative Ministry.
g. An inter ministerial committee may be constituted to assist the Apex Committee for expeditious inclusion/deletion of CPSEs in Navratna category.
This will lead to devolving greater managerial and commercial autonomy to successful profit making PSEs operating in a competitive environment.
The policy of the Government towards public sector has been enunciated in the National Common Minimum Programme (NCMP) as under:-
“The UPA Government is committed to a strong and effective public sector whose social objectives are met by its commercial functioning. But for this, there is need for selectivity and a strategic focus. The UPA is pledged to devolve full managerial and commercial autonomy to successful, profit-making companies operating in a competitive environment. Generally profit-making companies will not be privatized.”
The Prime Minister in his address to Chief Executives of Central Public Sector Enterprises (CPSEs) on September 4, 2004 also stated that the Government would take steps to make CPSEs more efficient and self-reliant.
This proposal deals with the issue of devolving full managerial and commercial autonomy to successful profit making enterprises operating in a competitive environment. The CPSEs could broadly be put in 5 categories, namely, (a) Navratna CPSEs, (b) Miniratna CPSEs, (c) other profit making CPSEs, (d) marginally profit making/loss incurring CPSEs and (e) chronically sick CPSEs. The Navratna, Miniratna and other profit making companies could be considered as successful CPSEs. Phasing out of trade barriers under WTO, increasing globalisation and entry of private sector in different areas which were earlier exclusively reserved for the public sector under the policy of ‘commanding heights’ have of late put the CPSEs in a highly competitive environment. All the Navratna CPSEs and many of the Miniratna and other profit making CPSEs are listed in the Stock Exchanges and many of these have the inherent capability and potential of improving their performance level to heights comparable with successful private sector companies. However, in order to achieve their full potential, the CPSEs need more powers and autonomy.
The Boards of CPSEs already enjoy varying degrees of managerial and commercial autonomy. The extent of autonomy presently delegated to the CPSEs is given in the Navratna Scheme dated July 22, 1997, Miniratna Scheme dated October 9, 1997 and DPE OM dated May 6, 1997.
YSR/DS/HS/LV
|
