Navratnas

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See Navaratna for the talisman, set of stones and gems.

Navratnas are the nine Public Sector Enterprises or PSE, identified by the Government of India in 1997 as its crown jewels or the most prestigious Public Sector Undertaking (PSU)s, which allowed them greater automony to compete in the global market ^[1].

1 Criterion of selection
2 Significance
3 Miniratnas
4 History
5 The Navratnas List
- 5.1 Main members
- 5.2 New members
6 References
7 External links
8 Author

[edit] Criterion of selection

Navaratna status is conferred by Department of Public Enterprises.To be qualified as a navaratna, the company must obtain a score of 60(of the total 100).The score is based on six parameters which include net profit to net worth,total manpower cost to total cost of production or cost of services,PBDIT(Profit Before Depreciation,Interest and Taxes)to capital employed,PBDIT to turnover,EPS(Earning Per Share) and inter-sectoral performance.Additionally,a company must first be a miniratna and must have four independent directors on its board before it can be made a navaratna ^[2].

[edit] Significance

The 'Navaratna' status offers a company enhanced financial and operational autonomy and empowers it to invest up to Rs. 1000 cr or 15% of their net worth on a single project without seeking government approval. In a year, these companies can spend up to 30% of their net worth not exceeding Rs. 1000 cr. They will also have the freedom to enter joint ventures, form alliances and float subsidiaries abroad.

[edit] Miniratnas

In addition, the Government created another category called Miniratna. This designation applies to PSUs that have made profits continuously for the last three years or earned a net profit of Rs 30 crores or more in three years. In 2002, there were 41 government enterprises that were awarded Miniratna status.

Four more PSUs - NALCO, NMDC, Power Grid Corporation and REC - would also be given Navratna status as soon as they fill all the vacancies for independent directors.NMDC has been turned into navratna by the govt. of india in march 2008.

[edit] History

Originally Navaratna is talisman or an ornament comprising if nine precious gems. Later, this symbology was adopted in the courts of ancient Indian king Vikramaditya and most recently in the courts of Mughal Akbar, where the Navaratnas were a group of nine extraordinary people in a king's court.

[edit] The Navratnas List

The original list of 1997 included BHEL, BPCL, HPCL, IOC, IPCL, NTPC, ONGC, SAIL and VSNL, of which IPCL and Videsh Sanchar Nigam Ltd (VSNL) were later privatised. (GAIL) and (MTNL joined the list in November 1997 ^[3]. Later in June 22, 2007 the government awarded the coveted status to three more PSUs, viz. BEL, HAL and Power Finance Corporation (PFC).