Navratna Status conferred on BEL, HAL and PFC

The Finance Minister, Shri P. Chidambaram conferred Navratna status on three Central Public Sector Enterprises (CPSEs), viz (i) Bharat Electronics Limited, (ii) Hindustan Aeronautics Limited and (iii) Power Finance Corporation Limited and released the "Guidelines on Corporate Governance for CPSEs", here today.

Conferring the Navratna status on three CPSEs, the Finance Minister said, "we need to reassess the role of CPSEs in the context of growing economy." He said more and more CPSEs should list on the Stock Exchange. Shri Chidambaram said, he was confident that the Heavy Industries and Public Enterprises Minister, Shri Sontosh Mohan Dev would continue to take firm, bold and decisive steps in revitalizing the CPSEs.

Navratna status would empower Boards of Directors of these CPSEs to exercise greater autonomy and powers and thereby substantially improve their performance. Besides, these CPSEs can improve their activities to become global giants. In August, 2005, the Government had substantially enhanced the powers delegated to the Boards of Directors of Navratna, Miniratna and other profit making CPSEs.

The Government also approved the Guidelines on Corporate Governance for CPSEs. These guidelines have been formulated through a consultation process with various stakeholders and keeping in view the relevant laws, rules and instructions. These guidelines cover issues like composition of Board of Directors, setting up of Audit Committees, role and powers of Audit Committees, issues relating to subsidiary companies, disclosures, accounting standards, risk management, compliance and schedule of implementation, etc. These guidelines will be for an experimental phase of one year and suitable adjustments would thereafter be made in these guidelines in the light of experience gained. Proper implementation of these guidelines would facilitate protection of interests of shareholders and other stakeholders.

Earlier, in his speech, Union Minister for Heavy Industries and Public Enterprise, Shri Sontosh Mohan Dev said, "the CPSEs have a glorious history. From a modest beginning in April 1951 with 5 enterprises, their number has now gone up to 245. The investment in CPSEs has gone up from Rs.29 crore in 1951 to about Rs.4 lakh crore in 2006. In 2005-06, the Public Enterprises with a total turnover of about Rs.8.3 lakh crore accounted for 11 per cent of GDP." He said that the Government under NCMP had taken a number of steps to create favourable business environment for CPSEs. Government supported revival of 26 CPSEs with cash and non-cash assistance of Rs.8,450 .00 crore, he added. Shri Dev said, four more companies i.e. National Aluminium Company Limited, National Mineral Development Corporation of India Limited, Power Grid Corporation of India Limited and Rural Electrification Corporation Limited would also be conferred Navratna status as soon as they fulfilled the condition of requisite number of non-official Directors on their Boards. Earlier, the Navratna Companies consisted of nine CPSEs : BHEL, BPCL, GAIL, HPCL, IOC, MTNL, NTPC, ONGC and SAIL.

The Minister of State for Heavy Industries and Public Enterprises, Smt. Kanti Singh and Secretary, Ministry of Heavy Industries and Public Enterprises, Dr. R.C. Panda also spoke on the occasion.

Source : Press Information Bureau

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