Navratna Status

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Overview:

Recently, the Indian Renewable Energy Development Agency public sector undertaking company was granted ‘Navratna status' from the department of public enterprises.

About Navratna Status

  • The government categorises all Public Sector Undertakings (PSUs) into three categories, namely Maharatna, Navratna, and Miniratna.
  • The Government had introduced the ‘Navratna’ scheme in 1997.
  • Criteria for Navratna status
    • A PSU should be a Miniratna-I, Schedule 'A' company, should have obtained an 'excellent' or 'very good' MoU rating in three of the last five years, and must have a composite score of 60 in six performance indicators.
    • It must report a net profit of more than Rs 5,000 crore for three consecutive years, and maintain an average annual turnover of Rs 25,000 crore for three years, or have an annual average net worth of over Rs 15,000 crore for three years.
  • Benefits
    • Financial Independence: They invest up to ₹1,000 crore without seeking approval from the central government.
    • Navratna companies are also allowed to invest up to 15% of their net worth on a single project, or 30% of their net worth in a given year, subject to a cap of ₹1,000 crore.
    • To incur capital expenditure on purchase of new items or for replacement, without any monetary ceiling.
    • To enter into technology joint ventures or strategic alliances.

Q1: What is Public Sector Undertakings?

PSUs in India are government-owned enterprises in which 51 percent or more share capital is held by the Government of India or state governments or joint ventures between multiple Public Sector Enterprises.

Source: IREDA share price jumps over 10% as it attains 'Navratna status'