From UPSC perspective, the following things are important :
Prelims level: Navratna Status
Why in the News?
The Indian Railway Catering and Tourism Corporation (IRCTC) and the Indian Railway Finance Corporation (IRFC) have been granted Navratna status, making them the 25th and 26th Navratna companies in India.
Other Navratna Companies in Indian Railways
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What is Navratna Status?
- Introduced in 1997, the Navratna scheme identifies high-performing CPSEs and grants them financial and operational independence.
- It allows selected companies to compete globally while maintaining public sector ownership.
- Categories of PSUs in India:
- Maharatna: Largest CPSEs with highest financial powers.
- Navratna: Mid-tier CPSEs with strategic autonomy.
- Miniratna: Emerging CPSEs with limited independence.
Eligibility Criteria for Navratna Status:
A CPSE must-
- Be a Miniratna-I company with an Excellent or Very Good rating in its MoU performance in three out of five years.
- Achieve a composite score of 60+ based on:
- Net Profit to Net Worth
- Manpower Cost to Total Cost of Production
- Profitability Ratios (PBDIT & PBIT)
- Earnings Per Share
- Inter-Sectoral Performance
Benefits of Navratna Status:
- Investment Autonomy: Can invest ₹1,000 crore or 15% of net worth in a single project without government approval.
- Strategic Expansion: Freedom to form joint ventures, subsidiaries, and acquisitions.
- Operational Flexibility: Can make independent business and investment decisions.
- Enhanced Market Position: Attracts more investors and improves stock performance.
PYQ:[2011] Why is the Government of India disinvesting its equity in the Central Public Sector Enterprises (CPSEs)? 1. The Government intends to use the revenue earned from the disinvestment mainly to pay back the external debt. 2. The Government no longer intends to retain the management control of the CPSEs. Which of the statements given above is/ are correct? (a) 1 only (b) 2 only (c) Both 1 and 2 (d) neither 1 nor 2 |
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