Navratna was the title given originally to 9 Public Sector Enterprises (PSEs) identified by the Government of India in 1997 as "public sector companies that have comparative advantages", giving them greater autonomy to compete in the global market so as to "support [them] in their drive to become global giants".
PSU companies are divided into three categories:
· Miniratna ( Category 1 and Category 2)
Originally, the term Navaratna meant a talisman or ornament composed of nine precious gems. Later, this symbology was adopted in the courts of Emperor Vikramaditya and the Mughal emperorAkbar, where the Navaratnas were a group of nine extraordinary men in their respective courts.
In 2009, the government established the Maharatna status, which raises a company's investment ceiling from Rs. 1,000 crore to Rs. 5,000 crore. The Maharatna firms can now decide on investments of up to 15 per cent of their net worth in a project; the Navaratna companies could invest up to Rs 1,000 crore without explicit government approval.
There are currently 7 Maharatnas, 14 Navratnas and 53 Miniratnas-I and 16 Miniratna-II.
There are multiple factors and criterias for granting 'ratna' status. However, major criteria of awarding status are:
· Three years with an annual net profit of over Rs. 2,500 crore
· Net worth of Rs. 10,000 crore
· Turnover of Rs. 25,000 crore
· A score of 60 (out of 100), based on six parameters which include net profit, net worth, total manpower cost, total cost of production, cost of services, PBDIT (Profit Before Depreciation, Interest and Taxes), capital employed, etc.
· A company must first be a Miniratna and have 4 independent directors on its board before it can be made a Navratna.
· Miniratna Category-I
· Have made profits continuously for the last three years or earned a net profit of Rs. 30 crore or more in one of the three years.
· Miniratna Category-II
· Have made profits for the last three years continuously and should have a positive net worth.
The Categorisation entitles the company boards to do investments up to a limit (depending on the status) without seeking government permission.
· Maharatna: up to Rs.1,000 crore – Rs. 5,000 crore, are free to decide on investments up to 15% of their net worth in a project.
· Navratna: up to Rs. 1,000 crore or 15% of their net worth on a single project or 30% of their net worth in the whole year (not exceeding Rs. 1,000 crores).
· Miniratna-I: up to Rs. 500 crore or equal to their net worth, whichever is lower.
· Miniratna-II: up to Rs. 300 crore or up to 50% of their net worth, whichever is lower.
List of Maharatna
1. Coal India Limited
2. Indian Oil Corporation
3. NTPC Limited
4. Steel Authority of India limited
5. Bharat Heavy Electricals Limited
6. GAIL (India) Limited
7. Oil and Natural Gas Corporation
1. Bharat Electronics Limited
2. Bharat Petroleum Corporation Limited
3. Hindustan Aeronautics Limited
4. Hindustan Petroleum Corporation Limited
5. Mahanagar Telephone Nigam Limited
6. National Aluminium Company Limited
7. National Mineral Development Corporation Limited
8. Neyveli Lignite Corporation Limited
9. Oil India Limited
10. Power Finance Corporation Limited
11. Power Grid Corporation of India Limited
12. Rashtriya Ispat Nigam Limited
13. Rural Electrification Corporation Limited
14. Shipping Corporation of India Limited
There are 53 companies under Miniratna- Category 1 and 16 companies under Miniratna Category-2
By promoting CPSE Exchange Traded Funds, government also extended an opportunity in March 2014 for investors to invest in 10 select Maharantas,Navratnas and Minirantas.
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