Centre places BHEL and SAIL under one-year review over Maharatna eligibility concerns

The Centre has placed Bharat Heavy Electricals Limited (BHEL) and Steel Authority of India Limited (SAIL) under a one-year review period after both companies failed to meet the profitability requirement prescribed for Maharatna status. The review could lead to their downgrade to Navratna status if financial performance does not improve during the assessment period. The move follows a government review of central public sector enterprises and their compliance with Maharatna eligibility norms.

BHEL and SAIL are currently the only two among India’s 14 Maharatna public sector companies that do not satisfy the requirement of maintaining an average annual profit after tax of more than ₹5,000 crore over the preceding three years. While both companies continue to meet the turnover and net worth criteria, their profitability performance has fallen short of the prescribed benchmark. Maharatna companies are also required to maintain significant international operations in addition to financial eligibility standards.

A downgrade from Maharatna to Navratna status would reduce the financial autonomy available to the companies. Maharatna enterprises can make equity investments of up to ₹5,000 crore without prior government approval, while Navratna companies are permitted investments of up to ₹1,000 crore. The review recommendation was made by a committee headed by Cabinet Secretary T. V. Somanathan as part of a broader assessment of public sector enterprises.

The review process has also triggered a wider examination of the Maharatna eligibility framework. Representatives from NITI Aayog informed the committee that the existing turnover, net worth and profitability thresholds were established in 2010 and have not been revised since then. The committee has asked the Department of Public Enterprises to reassess these criteria by indexing them to 2025 price levels, after which public sector companies may be evaluated under updated standards.

During the review, the Steel Ministry stated that SAIL recorded an average annual turnover exceeding ₹1 trillion over the last four years and an average net worth of ₹53,976 crore, although it last met the profitability requirement in 2022-23. In BHEL’s case, NITI Aayog identified human resource policies as a factor affecting growth and recommended a comprehensive review. The Ministry of Heavy Industries informed the committee that measures had already been initiated to strengthen BHEL’s financial performance, while both ministries have been asked to submit turnaround plans aimed at improving profitability and operational results.