General Awareness: Policy's of Navaratna, Miniratna and Maharatnas in India for UPSC, SSC Exams

Policy's of Navaratna, Miniratna and Maharatnas 

1) Policy of Navartnas:
Navaratna was the title given originally to nine Public Sector Enterprises (PSEs), identified by the Government of India in 1997, as its most prestigious, which allowed them greater autonomy to compete in the global market. Navaratna status empowers the PSUs to invest up to Rs. 1000 crore or 15% of their net worth on a single project without seeking government approval. The overall ceiling on such investments in all projects put together is 30%, of the net worth of the company.

Criteria for Navaratna Status for PSUs:

• It should have a composite score of 60 out of 100 marks based on these six criterias-Net Profit to Net Worth, manpower cost to cost of production or services, gross margin as capital employed, gross profit as turnover, earnings per share, inter-sectoral comparison based on Net Profit to Net Worth.
• The company should also have four independent directors on its board. Navaratna companies, subjects to certain guidelines have extra power to incur capital expenditure and decide upon joint ventures.It should have a schedule "A" and Miniratna category-1 status. 
• Set-Up subsidiaries/offices abroad.Enter into technological and strategic alliances.
• It should have at least three "excellent" or 'very good' Memorandum of Understanding (MoU) ratings during the last five years.
• Raise funds from capital markets (international and domestic) enjoy substantial operational and managerial autonomy.

2) Policy of Miniratnas:
The government has also accorded the status of Miniratna to some profit making Public Sector Enterprises (PSEs). There are two categories of Miniratnas.

1) Category I:
These are companies, which have made a profit in each of last three years and earned a profit of Rs. 30 crore in atleast one of the three years. They are allowed to incur capital expenditure without government approval upto 500 crore or equal to their net worth whichever is lower. There are 54 Miniratnas of this category at present.

2) Category II:
These are companies, which have made profits for the last three years continuously and have a positive Net Worth. They can incur capital expenditure upto Rs. 300 crore or 50% of their Net Worth whichever is lower. There are presently 18 such Category-II Miniratnas.

3) Policy of Maharatnas:
Maharatnas Scheme was introduced for Central Public Sector Enterprises (CPSEs), with effect from 19th May, 2010, in order to empower mega CPSEs to expand their operations and emerge as global giants. The objective of the scheme is to delegate enhanced powers to the boards of identified large-sized Navaratna CPSEs, so as to facilitate expansion of their operations, both in domestic as well as global markets. The coveted status empowers the hoards of these firms to lake investment decisions up to Rs.5,000 crore as against the present Rs. 1,000 crore limits for Navaratna without seeking government approval. The Maharatna firms would now be free to decide oil investments up to 15% of their Net Worth in a project, limited to an absolute ceiling of Rs. 50,000 crore.