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Poorest performance of SAIL & BHEL; don’t meet Maharatna criteria
Govt considers downgrading from Maharatna to Navratna status
The Government of India has expressed dissatisfaction over the poorest performance of Steel Authority of India Limited (SAIL) and Bharat Heavy Electricals Limited (BHEL).
Cabinet Secretary, Dr T V Somanathan has given a reprimand for not meeting the criteria of average annual net Profit After Tax (PAT) during the last three years of more than Rs 5,000 crore.
At the performance review meeting chaired by the Cabinet Secretary, it was found that 12 out of 14 CPSEs meet the eligibility criteria, but Steel Authority of India Limited (SAIL) and Bharat Heavy Electricals Limited (BHEL) do not meet the criteria of average annual net PAT.
The Department of Public Enterprises (DPE) will place SAIL and BHEL on notice for one year. Their performance will be reviewed in the current financial parameters after one year, divestment of Maharatna status and 'down-gradation’ to Navratna may also be considered.
After the performance review of SAIL, it was informed that SAIL is among the leading global steel producers and has significant domestic and international presence and the average annual turnover is more than Rs. 1 lakh crore for the last 4 years and its average net worth is Rs. 53,976 Cr. It has entered into 16 Joint Ventures, out of which 8 are operational and 2 are making profits. The total investment made by JVs in 2024-25 was Rs. 1,463 Cr and the dividend income from the JVs was Rs. 220 Cr. The challenges being faced by the Steel Sector such as dumping by land border countries, dependence on imports for raw materials, price volatility etc. were highlighted. It was also informed that the performance in 2025-26 has improved and the PAT reported is Rs. 3,233 Cr (against Rs. 2,148 Cr in 2024-25). Joint Secretary, M/o Steel informed that the threshold of Rs. 5,000 Cr of average annual net PAT during the last 3 years was last met by SAIL in 2022-23. Due to rising steel prices in the subsequent years, the average PAT has come down. It was informed that the IMC recommended to place SAIL on notice for 3 years to improve financials, considering strategic importance and cyclical industry conditions.
At the performance review of BHEL, it was informed that BHEL is a leading engineering and manufacturing CPSE with significant global and domestic presence. The performance of the CPSE has improved significantly from 2024-25 and the projected profit after tax in 2025-26 is Rs. 1,943 Cr against Rs. 513 Cr in 2024-25. Program Director, NITI Aayog observed that HR/ manpower policies appear to be a major constraint in the growth of BHEL and require a comprehensive examination. Secretary, Ministry of Power highlighted that BHEL has not been able to meet the requirement of transmission infrastructure as required. Secretary. M/o Heavy Industries highlighted that various reforms have been taken up such as reduction of the performance incentive to 16% and ban on creation of new posts at E-9 level. The profit of BHEL has increased by more than 7 times, and the projected PAT for 2025-26 is more than Rs. 1900 Cr against Rs. 513 Cr in 2024-25. A plan has been put in place for improving its financial performance. It was informed that the IMC has recommended to place BHEL on notice for three years with a condition of substantial annual PAT growth.
Program Director, NITI Aayog observed that the criteria for evaluation by the IMC primarily captures the growth of the CPSEs and does not reflect their future plans. Maharatna CPSEs are expected to have a significant role in nation building and provide support during crises, which should also be considered in their performance evaluation. It was also observed that the thresholds of turnover, net worth and PAT have been defined in 2010, and have not been adjusted/ revised to reflect the real values. Secretary, D/o Defence Production suggested that delegated powers should be reversed in case CPSEs are not using them. Secretary, M/o Power observed that the performance of the CPSEs should be evaluated vis-a-vis the performance of their peers in the private sector. Cabinet Secretary pointed out that if the CPSEs are unable to meet the criteria as defined in 2010, which are not indexed to reflect the real prices today, then the extent of delegated powers being enjoyed by them should be re-evaluated . He emphasised that whether such CPSEs merit such delegation should be critically examined by DPE, and immunity from divestment of Maharatna status should not be granted. The performance of CPSEs should be done comprehensively, not only based on the growth parameters but their contribution to nation building and Atmanirbharta, returns on investments etc.
The Government of India has expressed dissatisfaction over the poorest performance of Steel Authority of India Limited (SAIL) and Bharat Heavy Electricals Limited (BHEL).
Cabinet Secretary, Dr T V Somanathan has given a reprimand for not meeting the criteria of average annual net Profit After Tax (PAT) during the last three years of more than Rs 5,000 crore.
At the performance review meeting chaired by the Cabinet Secretary, it was found that 12 out of 14 CPSEs meet the eligibility criteria, but Steel Authority of India Limited (SAIL) and Bharat Heavy Electricals Limited (BHEL) do not meet the criteria of average annual net PAT.
The Department of Public Enterprises (DPE) will place SAIL and BHEL on notice for one year. Their performance will be reviewed in the current financial parameters after one year, divestment of Maharatna status and 'down-gradation’ to Navratna may also be considered.
After the performance review of SAIL, it was informed that SAIL is among the leading global steel producers and has significant domestic and international presence and the average annual turnover is more than Rs. 1 lakh crore for the last 4 years and its average net worth is Rs. 53,976 Cr. It has entered into 16 Joint Ventures, out of which 8 are operational and 2 are making profits. The total investment made by JVs in 2024-25 was Rs. 1,463 Cr and the dividend income from the JVs was Rs. 220 Cr. The challenges being faced by the Steel Sector such as dumping by land border countries, dependence on imports for raw materials, price volatility etc. were highlighted. It was also informed that the performance in 2025-26 has improved and the PAT reported is Rs. 3,233 Cr (against Rs. 2,148 Cr in 2024-25). Joint Secretary, M/o Steel informed that the threshold of Rs. 5,000 Cr of average annual net PAT during the last 3 years was last met by SAIL in 2022-23. Due to rising steel prices in the subsequent years, the average PAT has come down. It was informed that the IMC recommended to place SAIL on notice for 3 years to improve financials, considering strategic importance and cyclical industry conditions.
At the performance review of BHEL, it was informed that BHEL is a leading engineering and manufacturing CPSE with significant global and domestic presence. The performance of the CPSE has improved significantly from 2024-25 and the projected profit after tax in 2025-26 is Rs. 1,943 Cr against Rs. 513 Cr in 2024-25. Program Director, NITI Aayog observed that HR/ manpower policies appear to be a major constraint in the growth of BHEL and require a comprehensive examination. Secretary, Ministry of Power highlighted that BHEL has not been able to meet the requirement of transmission infrastructure as required. Secretary. M/o Heavy Industries highlighted that various reforms have been taken up such as reduction of the performance incentive to 16% and ban on creation of new posts at E-9 level. The profit of BHEL has increased by more than 7 times, and the projected PAT for 2025-26 is more than Rs. 1900 Cr against Rs. 513 Cr in 2024-25. A plan has been put in place for improving its financial performance. It was informed that the IMC has recommended to place BHEL on notice for three years with a condition of substantial annual PAT growth.
Program Director, NITI Aayog observed that the criteria for evaluation by the IMC primarily captures the growth of the CPSEs and does not reflect their future plans. Maharatna CPSEs are expected to have a significant role in nation building and provide support during crises, which should also be considered in their performance evaluation. It was also observed that the thresholds of turnover, net worth and PAT have been defined in 2010, and have not been adjusted/ revised to reflect the real values. Secretary, D/o Defence Production suggested that delegated powers should be reversed in case CPSEs are not using them. Secretary, M/o Power observed that the performance of the CPSEs should be evaluated vis-a-vis the performance of their peers in the private sector. Cabinet Secretary pointed out that if the CPSEs are unable to meet the criteria as defined in 2010, which are not indexed to reflect the real prices today, then the extent of delegated powers being enjoyed by them should be re-evaluated . He emphasised that whether such CPSEs merit such delegation should be critically examined by DPE, and immunity from divestment of Maharatna status should not be granted. The performance of CPSEs should be done comprehensively, not only based on the growth parameters but their contribution to nation building and Atmanirbharta, returns on investments etc.
