Date:03/03/2006 URL: http://www.thehindubusinessline.com/2006/03/03/stories/2006030302560400.htm

Back Navratna tag eludes BSNL again

Thomas K. Thomas

New Delhi, March 2

Telecom major Bharat Sanchar Nigam Ltd's bid to join the elite club of `Navratna' companies has fallen through yet again with the company failing to meet the specifications of the Department of Public Enterprises. The company instead received a Mini Ratna category 1 Public Sector Enterprise status on February 21. There are only nine Navratna companies, including Bharat Heavy Electricals Ltd, Bharat Petroleum Corporation Ltd, Gas Authority of India Ltd and Mahanagar Telephone Nigam Ltd.

BSNL failed to get Navratna status because it did not get "Excellent" or "Very Good" rating in three of the past five years. Its application was rejected also because it was not a Mini Ratna category 1 PSE, which is one of the requirements for a Navratna status. This is for the eighth time that BSNL's application has been rejected since 2001.

The company expects the Navratna status to give it more autonomy in decision-making to take on competition from private operators.

Navratna companies are allowed to invest up to Rs 1,000 crore in establishing joint ventures or setting up subsidiaries in India or abroad. The board of directors have powers to execute mergers and acquisitions without prior approval from the government. The board also has power over appointments and transfers of executives below board-level. ) for functional directors.

The Mini Ratna status will give the BSNL board some autonomy. It can make investment decisions worth up to Rs 500 crore without prior government approval.