The Department of Public Enterprises recently granted Navratna status to the Indian Renewable Energy Development Agency, a public sector undertaking.

1. IREDA has now attained the Navratna status and has a faster approval process in place.
2. no external interference for opening of subsidiaries, opening of branches, etc.

About Navratna Status:

1. The government categorizes public sector undertakings (PSUs) into 3 groups:
   1. Maharatna
   2. Navratna
   3. Miniratna
2. The "Navratna" program was implemented by the government in 1997.

Criteria for Navratna Status:

1. A PSU must be a Schedule 'A' Miniratna-I company, have received a rating of "excellent" or "very good" in a memorandum of understanding (MoU) in 3 of the last 5 years

1. Should have a composite score of 60 in 6 performance indicators.

Benefits of Navratna Status:

1. Financial Independence: They invest up to ₹1,000 crore without seeking approval from the central government.
2. Navratna companies are also allowed to invest up to 15% of their net worth in a single project, or 30% of their net worth in a given year, subject to a cap of ₹1,000 crore.
3. To make capital expenditure without any monetary limit for purchase or replacement of new goods.
4. Enter into technology joint ventures or strategic alliances.

Q: What is Public Sector Undertakings?

Public Sector Undertakings (PSUs) are government-owned companies or enterprises in India. They play a significant role in the Indian economy.

Key Features

1. Ownership: The central or state governments hold a majority stake (at least 51%) in PSUs. This means the government has significant control over their operations.
2. Purpose: PSUs were established to achieve various socio-economic goals such as:
   1. Infrastructure development: Building critical infrastructure like power plants, roads, railways, etc.
   2. Strategic industries: Operating in sectors like defense, oil, and gas that are important for national security.
   3. Social welfare: Providing essential services like healthcare and education at affordable prices, especially in remote areas.
   4. Economic development: Promoting balanced regional growth and employment generation.

Types of PSUs

PSUs in India fall into a few categories:

1. Central Public Sector Enterprises (CPSEs): These are owned and primarily managed by the central government. Examples include ONGC (Oil and Natural Gas Corporation), IOCL (Indian Oil Corporation Limited), and BHEL (Bharat Heavy Electricals Limited).
    
2. State Level Public Enterprises (SLPEs): These are owned and primarily managed by individual state governments.
    
3. Statutory corporations: These are established through a special Act of Parliament and have a distinct legal structure. Examples are the Life Insurance Corporation of India (LIC) and the Food Corporation of India (FCI).

Classification Based on their profitability, Indian CPSEs are further classified into:

1. Maharatnas: The largest and most profitable CPSEs with significant global presence.
2. Navratnas: Profitable CPSEs with the potential to become Maharatnas.
3. Miniratnas: Less profitable CPSEs, but still strategically important.

Criteria for grant of Maharatna status to CPSEs:

The CPSEs meeting the following criteria are eligible to be considered for grant of Maharatna status.

1. Having Navratna status
2. Listed on Indian stock exchange with minimum prescribed public shareholding under SEBI regulations
3. An average annual turnover of more than Rs. 25,000 crore during the last 3 years
4. An average annual net worth of more than Rs. 15,000 crore during the last 3 years
5. An average annual net profit after tax of more than Rs. 5,000 crore during the last 3 years
6. Should have significant global presence/international operations.

Difference between turnover and net profit Turnover: If they sell lemonade worth Rs 100 in a day, this is the turnover. Net Profit: Suppose the lemons and sugar cost them Rs 20 . His gross profit is Rs 80. If they spend additional Rs 30 on advertising, their net profit will be Rs 50.

Criteria for grant of Navratna status to CPSEs:

1. The CPSEs which are Miniratna I, Schedule ‘A’ and have obtained ‘excellent’ or ‘very good’ MOU rating in 3 of the last 5 years
2. having composite score of 60 or above in 6 selected performance indicators are eligible to be considered for grant of Navratna status.

Criteria for grant of Miniratna status to CPSEs:

Miniratna Category-I status: - The CPSEs which have made profit in the last 3 years continuously, pre-tax profit is Rs.30 crores or more in at least one of the 3 years and have a positive net worth are eligible to be considered for grant of Miniratna-I status.

Miniratna Category-II status: - The CPSEs which have made profit for the last 3 years continuously and have a positive net worth are eligible to be considered for grant of Miniratna-II status.

1. Miniratna CPSEs should have not defaulted in the repayment of loans/interest payment on any loans due to the Government.
2. Miniratna CPSEs shall not depend upon budgetary support or Government guarantees.

Classification	Description	Criteria
Maharatnas	Largest and most profitable CPSEs with significant global presence	Having Navratna status Listed on Indian stock exchange (compliance with SEBI regulations) Average annual turnover > Rs. 25,000 crore (last 3 years) Average annual net worth > Rs. 15,000 crore (last 3 years) Average annual net profit after tax > Rs. 5,000 crore (last 3 years) Significant global presence/international operations
Navratnas	Profitable CPSEs with the potential to become Maharatnas	Miniratna I status 'Excellent' or 'Very Good' MOU rating in 3 of the last 5 years * Composite score >= 60 on 6 selected performance indicators
Miniratna (Category-I)	Less profitable CPSEs, but still strategically important	Profit for the last 3 years continuously Pre-tax profit >= Rs. 30 crore in at least one of the 3 years. Positive net worth
Miniratna (Category-II)	Less profitable CPSEs, but still strategically important	Profit for the last 3 years continuously Positive net worth

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