The Centre has put Bharat Heavy Electricals Limited and Steel Authority of India Limited under immediate review after both public sector undertakings failed to meet the required profitability criteria. If their financial performance does not show a significant turnaround over the next twelve months, both PSUs risk being downgraded to ‘Navratna’ status. Such a demotion would sharply curtail the financial autonomy of their respective boards, slashing their independent equity investment limit from 5,000 crore rupees down to just 1,000 crore rupees.
Out of India’s fourteen Maharatna companies, BHEL and SAIL are currently the only two failing to sustain an average annual profit after tax, or PAT, of more than 5,000 crore rupees over the preceding three years. While SAIL’s average annual turnover comfortably crossed the one-trillion-rupee mark, its net profit has lagged behind since the 2022-23 fiscal year.
This decision follows recommendations from a high-level committee led by Cabinet Secretary TV Somanathan. The panel has directed the respective ministries overseeing BHEL and SAIL to urgently submit comprehensive turnaround plans. Furthermore, this review has triggered a broader re-evaluation of the entire Maharatna eligibility framework. Pointing out that thresholds for turnover, net worth, and profitability have remained unchanged since 2010, NITI Aayog has urged the Department of Public Enterprises to revise these benchmarks by indexing them to 2025 prices, setting the stage for a wider reassessment of all central public sector enterprises.
