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”.
PSU companies are divided into three categories:
· Miniratna ( Category 1 and Category 2)
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 emperorAkbar, where the Navaratnas were a group of nine extraordinary men in their respective courts.
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.
There are multiple factors and criterias for granting ‘ratna’ status. However, major criteria of awarding status are:
· Three years with an annual net profit of over Rs. 2,500 crore
· Net worth of Rs. 10,000 crore
· Turnover of Rs. 25,000 crore