Context:
Recently, the Union government approved the upgradation of the Indian Railway Catering and Tourism Corporation (IRCTC) and Indian Railway Finance Corporation (IRFC) as Navratna companies.
More on the News
- With this upgrade, all seven listed Central Public Sector Enterprises (CPSEs) of Indian Railways now have Navratna status.
- The Department of Public Enterprises (DPE) of the Ministry of Finance picks the CPSEs for Navratna status.
- Now, India has a total of 26 Navratna companies.
Benefits of ‘Navratna’ status
- They have greater independence in forming joint ventures and entering into technology or marketing agreements.
- This status grants them greater autonomy in decision-making, and allows them to compete more effectively in domestic and international markets.
Indian Railway Catering and Tourism Corporation (IRCTC)
- IRCTC was incorporated in 1999 as an extended arm of the Indian Railways to upgrade, professionalize and manage the catering and hospitality services at stations, on trains and other locations.
- IRCTC functions under the Ministry of Railways, Government of India.
- Head office: New Delhi.
Indian Railway Finance Corporation (IRFC)
- IRFC was established in 1986 as the dedicated financing arm of Indian Railways for mobilizing funds from domestic as well as overseas Capital Markets.
- The primary objective of IRFC is to meet the predominant portion of the ‘Extra Budgetary Resources’ (EBR) requirement of the Indian Railways through market borrowings at the most competitive rates and terms.
- Since its inception, IRFC has funded the acquisition of 13,349 locomotives, 73,979 passenger coaches and 2,59,661 freight wagons.
- Head office: New Delhi.
Classification of Central Public Sector Enterprises (CPSEs)
- The government classifies Public Sector Undertakings (PSUs) into three groups, i.e. Maharatna, Navratna, and Miniratna.
- The main aim of assigning the “ratna” statuses to various CPSEs was to give operational freedom and decision-making power to the state-run entities.
| Criteria | Maharatna | Navratna | Miniratna |
| Eligibility | · Must already be a Navratna company and listed on the Stock exchange with minimum prescribed public shareholding under SEBI regulations· During the last three years, it should have an average annual turnover of over ₹25,000 crore, a net worth exceeding ₹15,000 crore, and a net profit after tax above ₹5,000 crore· Additionally, the CPSE should have a significant global presence or international operations | · Must already be a Miniratna I, Schedule ‘A’ CPSE and have obtained an ‘excellent’ or ‘very good’ MoU rating in three of the last five years· It should have a composite score of 60 or more in six performance indicators like profitability, productivity, efficiency, etc. | · Miniratna Category-I: The CPSEs which have reported profits in three consecutive years, have a pre-tax profit of ₹30 crore or more in at least one of the three years, and have a positive net worth are eligible to be considered for grant of Miniratna-I status.· Miniratna Category-II: The CPSEs with a profit for the last three successive years and have a positive net worth are eligible to be considered for grant of Miniratna-II status. |
| Financial Autonomy | Can invest up to ₹5,000 crore or 15% of their net worth in a single project without government approval | Can invest up to ₹1,000 crore or 15% of their net worth in a single project without government approval | Category I: Can invest up to ₹500 crore or an amount equal to their net worth, whichever is less Category II: Can invest up to ₹300 crore or 50% of their net worth, whichever is lower |
| Number of CPSEs | 14 | 24+2 newly added | 51 Miniratna Category-I and 11 Miniratna Category-II |