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New Delhi, Dec 24 (ANI): The Union Cabinet on Thursday approved the introduction of Maharatna category for Central Public Sector Enterprises (CPSEs).

The main objective of the Maharatna Scheme is to empower mega CPSEs to expand their operations and emerge as global giants.

With the introduction of Maharatna Scheme, the Department of Public Enterprises has achieved one of the three tasks identified to be completed within first 100 days programme in respect of their Department.

The CPSEs meeting recommended to the Centre to provide Maharatna status to those public sector industries which are already enjoying the status of Navaratna, listed on Indian stock exchange with minimum prescribed public shareholding under SEBI regulations.

The Maharatna status can also be granted to those PSEs whose an average annual turnover of more than Rs.25,000 crore during the last 3 years, an average annual net worth of more than Rs.15,000 crore during the last 3 years and an average annual net profit after tax of more than Rs.5,000 crore during the last 3 years.

According to CPSE guidelines the industry should have significant global presence and international operations to earn Maharatna status.

The procedure for grant of Maharatna status as well as their review is proposed to be similar to that in vogue for the grant of Navratna status.

The introduction of the above scheme will not entail any additional expenditure on the part of the Government.

Over the years, some of the Navratna companies have grown very big and have considerably larger operations than their peers. It was felt that these CPSEs which are at the higher end of the Navratna category and have potential to become Indian Multinational Companies (MNCs), can be recognized as a separate class, i.e. ‘Maharatna’.

The proposed higher category will act as an incentive for other Navratna companies, provide brand value and facilitate delegation of enhanced powers to CPSEs.

The Boards of Maharatna CPSEs in addition to exercising all powers to Navratna CPSEs, will exercise enhanced powers in the area of investment in joint ventures and subsidiaries and creation of below Board level posts.

The Boards of Maharatna CPSEs will have powers to make equity investment to establish financial joint ventures and wholly owned subsidiaries in India or abroad and undertake mergers and acquisitions, in India or abroad, subject to a ceiling of 15 percent of the net worth of the concerned CPSE in one project, limited to an absolute ceiling of Rs.5,000 crore (Rs.1000 crore for Navratna CPSEs).

The overall ceiling on such equity investments and mergers and acquisitions in all projects put together will not exceed 30 percent of the net worth of the concerned CPSEs. In addition, the Boards of Maharatna CPSEs will have powers to create below Board level posts up to E-9 level.

The Government had introduced the Navratna scheme, in 1977, to identify CPSEs that had comparative advantages and to support them in their drive to become global giants. At present, there are 18 Navratna CPSEs. (ANI)