• Ircon International Limited (IRCON) and RITES Ltd (RITES), both under the ministry of railways, have been granted Navratna status.

• The term ‘Navratna’ refers to a select group of top-performing Central Public Sector Enterprises (CPSEs) that have been granted greater autonomy and financial powers by the Centre in recognition of their superior performance.

• RITES Limited was established under the ministry of railways in 1974. It is a leading multi-disciplinary engineering & consultancy organisation, providing customised, competitive, diversified, and comprehensive, concept to commissioning services and integrated solutions in the transport and infrastructure sector in India and abroad. The services provided by the company cover transport and infrastructure sectors such as railways, highways, airports, ports, ropeways, urban transport, inland waterways, renewable energy, etc. The company has so far served clients in more than 55 countries.

• Ircon International Limited (IRCON) is an integrated engineering and construction company established in 1976. IRCON commenced its business as a railway construction company. Since 1985, the company diversified into the entire gamut of construction activities and infrastructure services. However, its primary focus and strength have consistently remained deeply rooted in the railway sector. IRCON has completed more than 300 infrastructure projects in India and more than 100 projects in over 20 countries. 

What is Maharatna, Navratna and Miniratna status?

Under Articles of Association, the board of directors of Central Public Sector Enterprises (CPSEs) enjoys autonomy in respect of recruitment, promotion and other service conditions of below board level employees. 

The board of directors of a CPSE exercises delegated powers subject to broad policy guidelines issued by the government from time to time. 

The government has granted enhanced powers to the Boards of the profit-making enterprises under various schemes like Maharatna, Navratna and Miniratna.

Maharatna scheme

• The main objective of the Maharatna scheme which was introduced in 2010 is to empower mega CPSEs to expand their operations and emerge as global giants.

• Maharatna CPSEs compared to others are given greater autonomy for flexibility in respect of capital expenditure, formation of strategic alliance, formulation of HR policies, etc.

• The Board of a Maharatna CPSE can make equity investments to undertake financial joint ventures and wholly-owned subsidiaries and undertake mergers and acquisitions in India and abroad, subject to a ceiling of 15 per cent of the networth of the concerned CPSE, limited to Rs 5,000 crore in one project.

• The board can also structure and implement schemes relating to personnel and human resource management and training. They can also enter into technology joint ventures or other strategic alliances.

Eligibility criteria for grant of Maharatna status

The CPSEs meeting the following eligibility criteria are considered for Maharatna status:

a) Having Navratna status.

b) Listed on Indian stock exchange with minimum prescribed public shareholding under SEBI regulations.

c) An average annual turnover of more than Rs 25,000 crore during the last three years.

d) An average annual net worth of more than Rs 15,000 crore during the last three years.

e) An average annual net profit after tax of more than Rs 5,000 crore during the last three years.

f) Should have significant global presence/international operations.

The Maharatna CPSEs are:

1) Bharat Heavy Electricals Limited

2) Bharat Petroleum Corporation Limited

3) Coal India Limited

4) GAIL India Limited

5) Hindustan Petroleum Corporation Limited

6) Indian Oil Corporation Limited

7) NTPC Limited

8) Oil & Natural Gas Corporation Limited

9) Power Grid Corporation of India Limited

10) Steel Authority of India Limited

11) Power Finance Corporation Limited (PFC).

12) REC Limited.

Navratna scheme

The government introduced the Navratna scheme in 1997.

Under this scheme, the Boards of Navratna CPSEs have been delegated enhanced powers in the areas of:

i) Capital expenditure

ii) Investment in joint ventures/subsidiaries

iii) Mergers & acquisitions

iv) Human resources management, etc.

Eligibility criteria for grant of Navratna status

The CPSEs which are Miniratna I, Schedule ‘A’ and have obtained ‘excellent’ or ‘very good’ MOU rating in three of the last five years and have a ‘Composite Score’ of performance to be 60 or above in six identified performance parameters are eligible to be considered for grant of Navratna status. 

The parameters are:

1) Net Profit to Net worth

2) Manpower Cost to total Cost of Production or Cost of Services

3) Profit Before Depreciation, Interest and Tax (PBDIT) to Capital Employed 

4) Profit Before Interest and Tax (PBIT) to Turnover

5) Earning Per Share

6) Inter-Sectoral Performance.

Navratna CPSEs are:

1) Bharat Electronics Limited

2) Container Corporation of India Limited

3) Engineers India Limited

4) Hindustan Aeronautics Limited

5) Mahanagar Telephone Nigam Limited

6) National Aluminium Company Limited

7) National Buildings Construction Corporation Limited

8) Neyveli Lignite Corporation Limited

9) NMDC Limited

10) Oil India Limited

11) Rashtriya Ispat Nigam Limited

12) Shipping Corporation of India Limited.

13) Ircon International Limited (IRCON)

14) RITES Ltd (RITES).

Miniratna scheme

• In October 1997, the government decided to grant enhanced autonomy and delegation of financial powers to some other profit making companies subject to certain eligibility conditions and guidelines to make them efficient and competitive.

• These companies, called Miniratnas, are in two categories, namely, Category- I and Category-II.

• Category-I CPSEs should have made profit in the last three years continuously, the pre-tax profit should have been Rs 30 crore or more in at least one of the three years and should have a positive net worth.

• Category-II CPSEs should have made profit for the last three years continuously and should have a positive net worth.

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