INTRODUCTION

Public sector enterprises or public sector undertakings have been the backbone of Indian Economy since the time of independence. With support from the Government of India, these companies have been involved in various industrial activities, manufacturing and producing various products, raw materials and offering numerous other services for the benefit of the citizens of India. These industries have been related to core sectors like Mining, Oil and Natural Gas, Electrical Power Generation and Distribution, Telecommunication, Iron and Steel, Heavy Water Resources, as well as industries in other verticals like fertilizers and Petro-Chemicals.

Many of these industrial units and organisations have been operating since the last 4 or 5 decades and have provided employment opportunities to millions of people as a gross estimation. But their primary contributions have been in the form of providing industrial components and services for the service and associated benefits of the common man. In an indirect sense, every small thing that is necessary for the smooth running of the country is dependent on these industries. The government is also able to earn revenues in terms of functioning of these companies. Importance of such organisations is almost indescribable and to honour such contributions, the Government of India confers special status to some of these industrial organisations, so that they can charter their path of progress towards growth and prosperity.

The Government came up with Navratna Scheme for public undertakings in 1997. It enhanced the powers of Board of Directors of high/profit making public sector undertakings in order to give them more financial autonomy. These Navratna Public Sector Undertakings were given additional autonomy in functional areas after signing Memorandum of Understanding (MOU) with Government of India. Initially there were nine companies enlisted as Navratna in 1997. Later on many new public companies have been enlisted in this coveted list. Since 2010, the government has came up with Maharatna scheme as well. Today there are four such categories viz. Maharatna, Navratna, Mini Ratna I and Mini Ratna II. These different categories are fixed according to the financial and administrative potential and efficiency of the public company.

Role Of Public Sector In India

The public sector has been playing a vital role in the economic development of the country. In fact the public sector has come to occupy such an important place in our economy, that on its effective performance depends largely the achievement of the country's economic n social goals.

Public sector is considered a powerful engine of economic development and an important instrument of self-reliance. The main contributions of public enterprises to the country's economy may be described as follows:

1. Fillings of Gaps: At the time of independence, there existed serious gaps in the industrial structure of the country, particularly in the fields of heavy industries such as steel heavy, machine tools, exploration an refining of oil, heavy Electrical and equipment, chemicals and fertilizers, defense equipment, etc. Public sector has helped to fill up these gaps. The basic infrastructure required for rapid industrialisation has been built up, through the production of strategic capital goods. The public sector has considerably widened the industrial base of the country.

2. Employment: Public sector has created millions of jobs to tackle the unemployment problem in the country. Public sector accounts for about two-thirds of the total employment in the organised industrial sector in India. By taking over many sick units, the public sector has protected the employment of millions. Public sector has also contributed a lot towards the improvement of working and living conditions of workers by serving as a model employer.

3. Balanced Regional Development: Public sector undertakings have located their plants in backward and untrodden parts of the county. There area lacked basic industrial and civic facilities like electricity, water supply, township an manpower. Public enterprises have developed these facilities thereby brining about complete transformation in the socioeconomic life of the people in these regions. Steel plants of Bhilai, Rourkela and Durgapur; fertilizer factory at Sindri, Machine Tool plants in Rajasthan, Precision Instruments plants in Kerla and Rajasthan, etc. are a few examples of the development of backward regions by the public sector.

4. Contribution to Public Exchequer: In recent years, the public sector has made increasing contributions to the public sector in the form of dividend, corporate taxes, excise and customs duty, etc. The total contribution from the public enterprises to the Exchequer increased from Rs. 11,074 crores in 1982-83 to Rs. 23, 972 crores in 1986-87.

5. Foreign Exchange Earnings: Public sector has contributed a great deal in improving the balance of payments position of the county. The public enterprises have saved valuable foreign exchange trough import substitution. Public enterprises have earned foreign exchange of Rs. 3,942 crores during 1986-87 by way of exports.

6. Development of Ancillary industries: In order to encourage the development of small scale and medium-sized industries in the country, the Government of India has launched a national programme. Public sector had contributed to this programme by fostering the growth of ancillary industries and satellite planets. Such plants have been established around the major public sector undertakings. There is a strong base of ancillary industries at several centers such as the Bokaro Industrial Complex, the Bhilai Steel Plant, The Rourkela Steel Complex, the Heavy Engineering Corporation at Ranchi, Hindustan Machine Tools at Bangalore, and the units of Bharat Heavy Electrical at Bhopal, Hyderabad and Hardwar.

7. Research and Development: As most of the public enterprises are engaged in high technology and heavy industries, they have undertaken research and development programmes in a big way. Public sector has laid strong and wide base for self-reliance in the field of technical know-how, maintenance and repair of sophisticated industrial plants, machinery and equipment in the country. Through the development of technological skill, public enterprises have reduced dependence on foreign knowhow. With the help of the technological capability, public sector undertakings have successfully competed in the international market an they have secured turnkey projects in several countries of the world.

8. Community Development: Several public sector undertakings have developed townships to provide all the civic amenities to their employees. These townships consists of houses, etc. Public enterprises have constructed roads and other infrastructural facility to link these townships to other parts of the country. Such townships have been very helpful in improving community life.

9. Social Justice : Public enterprises have contributed towards the achievement of constitutional objectives. They have been helpful in reducing the concentration of economic power in private hands, in curbing anti-social monopolies, in accelerating public control over the national economy and in bringing about a socialistic pattern of society.

In addition to the foregoing, the public sector has played an important role in the achievement of constitutional goals like reducing concentration of economic power in private hands, increasing public control over the national economy, creating a socialistic pattern of

society, etc. With all its linkages the public sector has made solid contributions to national self-reliance.

PSU companies are divided into three categories:

• Maharatna

• Navratna

• Miniratna CPSEs

• Category I

• Category II

Historical symbolism

Navaratna:

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 emperor Akbar, where the Navaratnas were a group of nine extraordinary men in their respective court.

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".

The Navratna status is offered to PSEs, which gives a company enhanced financial and operational autonomy and empowers it to invest up to Rs. 1000 crore 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.

Criteria for Navratna :

Navratna status is conferred by Department of Public Enterprises. To be qualified as a Navratna, the company must obtain a score of 60 (out of 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 have four independent directors on its board before it can be made a Navratna.

Maharatna status:

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.

Current Financial Autonomy Status

There are currently 7 Maharatnas, 14 Navratnas and 53 Miniratnas-I and 16 Miniratna-II.

There are multiple factors and criteria for granting 'ratna' status. However, major criteria of awarding status are:

Maharatna

Three years with an annual net profit of over Rs. 5000 crore Average annual Net worth of Rs. 15,000 crore for 3 years Average annual Turnover of Rs. 25,000 crore for 3 years

Navratna

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 Categorization 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, or 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 Limited4. Steel Authority of India limited5. Bharat Heavy Electricals Limited6. GAIL (India) Limited7. Oil and Natural Gas Corporation

List of Navratna:

1. Bharat Electronics Limited2. Bharat Petroleum Corporation Limited3. Bharat Heavy Electricals Limited4. Hindustan Aeronautics Limited5. GAIL (India) Limited6. Hindustan Petroleum Corporation Limited7. Mahanagar Telephone Nigam Limited8. National Aluminium Company Limited9. National Mineral Development Corporation Limited10. Neyveli Lignite Corporation Limited11. Oil India Limited12. Power Finance Corporation Limited13. Power Grid Corporation of India Limited14. Rashtriya Ispat Nigam Limited15. Rural Electrification Corporation Limited16. Shipping Corporation of India Limited

List of Miniratna-I:

1. Airports Authority of India2. Antrix Corporation3. Balmer Lawrie & Co.4. Bharat Dynamics Limited5. Bharat Earth Movers6. Bharat Sanchar Nigam Limited7. Bridge and Roof Company (India)8. Central Warehousing Corporation9. Central Coalfields10. Chennai Petroleum Corporation11. Cochin Shipyard12. Container Corporation of India13. Dredging Corporation of India14. Engineers India Limited15. Ennore Port

16. Garden Reach Shipbuilders & Engineers17. Goa Shipyard18. Hindustan Copper Limited19. HLL Lifecare Limited20. Hindustan Newsprint Limited21. Hindustan Paper Corporation Limited22. Housing and Urban Development Corporation23. India Tourism Development Corporation24. Indian Railway Catering and Tourism Corporation25. IRCON International Limited26. Kudremukh Iron Ore Company Ltd.27. Mazagon Dock Limited28. Mahanadi Coalfields Limited29. MOIL Limited30. Mishra Dhatu Nigam Limited31. MMTC Ltd32. MSTC Limited33. National Fertilizers Limited34. National Seeds Corporation Limited35. NHPC Limited36. Northern Coalfields Limited37. North Eastern Electric Power Corporation Limited38. Numaligarh Refinery Limited39. ONGC Videsh Limited40. Pawan Hans Helicopters Limited41. Projects and Development India Limited42. Railtel Corporation of India Limited43. Rashtriya Chemicals & Fertilizers Limited44. RITES Limited45. SJVN Limited (Nathpa Jhakri Dam)46. Security Printing and Minting Corporation of India Limited47. South Eastern Coalfields Limited48. State Trading Corporation of India Limited49. Telecommunications Consultants India Limited50. THDC Ltd51. Western Coalfields Limited52. Water and Power Consultancy Services Limited

List of Miniratna-II:

1. Bharat Pumps & Compressors Limited2. Broadcast Engineering Consultants India3. Central Mine Planning and Design Institute Limited4. Educational Consultants India Limited5. Engineering Projects (India) Limited6. FCI Aravali Gypsum and Minerals (India) Limited

7. Ferro Scrap Nigam Limited8. HMT (International) Limited9. HSCC (India) Limited10. India Trade Promotion Organisation11. Indian Medicines & Pharmaceuticals Corporation Limited12. MECON Limited13. National Film Development Corporation14. National Small Industries Corporation15. PECC Limited16. Rajasthan Electronics and Instruments Limited17. Balmer Lawrie

Conclusion

The Navratna Companies of India have survived from recession and still maintain that record of making profits.It has provided large employment opportunities. Now NAVARATNA companies has occupied a prominent position in the Indian economy. The Navratna companies are a group of Indian public-sector enterprises to which the Indian government has given a measure of financial and operational autonomy that allows them to make investments without the need to seek government approval. Navratna was the title given by the Indian government to public sector undertakings (PSUs) that have comparative advantages, giving them greater autonomy to compete in the global market so that they could emerge as global giants.

References Original govt. announcement about the Navratnas 1997

"Maharatna status for mega PSUs gets nod". The Times of India. 25 December 2009. Retrieved 29 December 2009.

Coal India gets Maharatna tag - Economic Times Article

PSUs get maharatna status - Indianexpress

PSUs get maharatna status - Indianexpress

Dept of Public Enterprises, Govt. of India