But more than a year after the launch of the policy, the 11 Navratnas are struggling to take off. The policy of giving autonomy to good performers has not achieved much. The Government preens with the feather of Navratna in its cap. The companies happily wear the Navratna status as a medal of honour on their lapel, but on the ground little has changed.

Of the eleven PSUs, only three have actually seen changes in their boards. Professionals have been selected to join as non-official directors in the boards of others, but the respective ministries have not cleared the names. As a result the companies have not been able to move ahead with their investment plans under the Navratna policy.

Interestingly, the Search Committee formed by the Government to select professionals for the boards wentthrough the entire exercise twice. The first round of selection was completed under the United Front Government. The panel of names was sent to the respective ministries. But the ministers delayed clearing these names. In the meanwhile the UF government fell and Bharatiya Janata Party came to power. The BJP then cancelled the panels for all except for the ones where the appointments had been made -- Bharat Heavey Electricals Limited (BHEL) and National Thermal Power Corporation (NTPC). The Search Committee then met again and selected a fresh batch of professionals in July and August this year. Now the names await appointment from the respective ministries.

The Navratna policy envisaged two key changes. Professionalisation of governing boards so that the company functions as a board-run organisation and not be Ministry-led. The second was to allow the companies the freedom to choose joint venture partners and make fresh investment without Government permission but subject to certain conditions.

Theoperational autonomy extended to the boards includes incurring capital expenditure on purchase of new items or for replacement without any monetary ceiling. Entering into technology joint venture or strategic alliances; obtaining technology; and organisational and capital restructuring. The companies have also been granted autonomy to establish financial joint ventures and wholly-owned subsidiaries in India or abroad with the stipulation that equity investment if the enterprises be limited to Rs 200 crore in any one project; be five per cent of the net worth of the PSU in any one project; be 15 per cent of the net worth of the PSUs in all joint venture/subsidiaries put together.

The 11 companies given these facilities are BHEL, Bharat Petroleum Corporation (BPCL), Hindustan Petroleum, Indian Oil, NTPC, Oil and Natural Gas Corporation, Steel Authority of India Limited (SAIL), Videsh Sanchar Nigam and Gas Authority Of India.

But of these, only the boards of BHEL and NTPC have actually been changed. BHEL'sboard has been reconstituted with the induction of four persons as non-officials. These include J. J. Irani, Managing Director of Tisco; Shekhar Datta, former president of CII; J. Jayaraman, former CMD of Cochin refineries; and Tarjani Vakil, former chairperson of Exim Bank of India. BHEL has also set up a three-member board level audit committee comprising two non-official directors, and director (finance) with the aim of strengthening internal controls and encouraging good audit practices.

NTPC has four non-official directors. P.N. Khandwalla, director IIM Ahmedabad; S.J. Coelho, former chairman of Gujarat Electricity Board; T.L. Shankar, principal of Administrative Staff College of India, Hyderabad; and Deepak Parekh, chairman of HDFC and IDFC. In the case of SAIL, Dr Parvinder Singh, CMD of Ranbaxy Labs and D. Basu, former CMD of State Bank of India were appointed non-executive directors only last week.

``It has taken the Government one year to change the boards of three companies. By the time allboards are changed it could be more than three years,'' says M.A. Hakeem, secretary general of the Standing Conference of Public Enterprises. ``This slow pace of change is rendering the entire exercise futile.''

This feeling is shared by many in the public sector. In fact, now the question is whether the Navratna policy has been overtaken by events. The Government is now talking privatisation of PSUs and not just disinvestment. In this context, a long drawn out process of granting autonomy appears out of place. ``In any case, real freedom will come only when the Governments reduces its stake in these companies. Until then only token autonomy will be given to given to them,'' says G. V. Ramakrishna, chairman of the Disinvestment Commission.

The initial welcome to the Navratna Policy in July last year excited Maran so much that he announced another policy for the profit making PSUs. Called the Mini-ratnas, the Government granted operational and investment freedom to 97 PSUs which had been making profits forthe previous three years. But again the freedom was incumbent upon a professionalised board. Till date professionals have been chosen as non-executive directors for just half of them.

The entire policy on autonomy has failed to take off because of two basic reasons. First is that while the Industry Ministry announced the policy, the other ministries did not put their weight behind it. The other ministries have not found it important enough to push through the changes quickly. Also, the different ministries often have their own agenda which does not always conform to the stated policy.

Secondly, the Department of Public Enterprises of the Industry Ministry is little more than coordination cell. While PSU policy is formulated and announced by it, it does have any powers to ensure quick implementation. And while the Committee of Secretaries is supposed to monitor the Navratna and globalisation policy, it has precious little to show for its efforts.

In fact, anticipation of such problems has led tosuggestions of a single authority to implement PSU reforms through privatisation. Finance Secretary Vijay Kelkar has suggested that a special purpose vehicle be created for disinvestment while Ramakrishna has suggested the creation of a trust to implement this. Says Hakeem, ``PSU reforms of any type will not succeed until all of them are brought under one umbrella. Only then can a policy be implemented effectively. Be it of creating global giants like Navratnas or be it of privatising them.''

Until the Government decides to take drastic steps towards PSU reforms, autonomy and freedom will exist only in official files.