Central Public Sector Enterprises

Introduction

The CPSEs under the Ministry have played a vital role in the industrial development of the country. Ranging from heavy electrical engineering equipment, the CPSEs cater to diverse sectors of the economy including civil construction, heavy machinery, tea plantation etc. Public Sector Undertakings (PSUs) are government-owned companies where the government, at the Union or the state level, or both own a majority stake of 51% or more of the company equity.

Classification of Central Public Sector Enterprises

• There are different systems of classification for CPSEs. Important among these are : 
  • Cognate Group-wise Classification: It  is based on the generic nature of work carried out by CPSEs and comes closest to the sectoral classification of industries in the private sector.
  • Grouping of CPSEs into 4 Schedules: Namely A,B,C & D, for purposes of determining the pay scales of Board level executives.
  • Classification of CPSEs into Maharatna, Navratna, Miniratna etc. for the purpose of delegation of powers. 
  • This article will focus on Maharatna, Navratna, and Miniratnaclassification of CPSE.

Overview of Maharatna, Navratna, and Miniratna CPSE

• As per recent data of the Department of Public Enterprises, India has 13 Maharatna companies, 16 Navratna companies in India, and 68 Miniratna companies divided into Category 1 and Category 2.
• Miniratna 
  • Category I Miniratna: Those PSEs which have made profits continuously for the last 3 years and earned net profit of rupees 30 crores are more in one of the 3 years.
    • Granted certain autonomy like incurring capital expenditure without government approval up to `500 crores or equal to their net worth whichever is lower.
    • Examples: Airports Authority of India, Antrix Corporation Limited, Balmer Lawrie & Co. Limited, Bharat Coking Coal Limited, Bharat Dynamics Limited, BEML Limited, Bharat Sanchar Nigam Limited, etc.
  • Category II Miniratna: Those PSEs which have made profit for the last 3 years continuously and should have a positive net worth.
    • Have autonomy to incurring the capital expenditure without government approval up to `300 crores or upto 50% of their net worth whichever is lower.
    • Examples: Artificial Limbs Manufacturing Corporation of India, Bharat Pumps & Compressors Limited, Broadcast Engineering Consultants India Limited, Engineering Projects (India) Limited, FCI Aravali Gypsum & Minerals India Limited, Ferro Scrap Nigam Limited, HMT (lnternational) Limited
• Navratna: 
  • To qualify, a company must have: 
    • Net worth exceeding ` 15,000 crore;  
    • Average turnover exceeding ` 25,000 crore for the last 3 years;  
    • Operating profit exceeding ` 300 crore for the last 3 years.
  • Autonomy: Investing up to ` 1,000 crore without government approval; Entering joint ventures or mergers without prior clearance for most projects.
  • Examples: Bharat Electronics Limited, Container Corporation of India Limited, Engineers India Limited, Hindustan Aeronautics Limited, Mahanagar Telephone Nigam Limited, National Aluminium Company Limited, National Buildings Construction Corporation Limited, Neyveli Lignite Corporation Limited, NMDC t.imited, Rashtriya Ispat Nigam Limited, Shipping Corporation of India Limited, Rail Vikas Nigam Limited, ONGC Videsh Ltd, Rashtriya Chemicals & Fertilizers Limited, IRCON International Limited, RITES Limited
• Maharatnas 
  • To qualify, a company must have:  
    • Net worth exceeding 5,000 crore for the last three years 
    • Average turnover exceeding ` 25,000 crore for the last 3 years; 
    • Operating profit exceeding ` 5,000 crore for the last 3 years.
  • Autonomy: 
    • Invest up to ` 5,000 crore without government approval; 
    • Form joint ventures abroad without needing prior clearance;  
    • Raise resources for their projects through various means.
  • Examples: Bharat Heavy Electricals Limited, Bharat Petroleum Corporation Limited, Coal India Limited, GAIL India Limited, Hindustan Petroleum Corporation Limited, Indian Oil Corporation Limited, NTPC Limited, Oil & Natural Gas Corporation Limited, Power Finance Corporation, Power Grid Corporation of India Limited, Steel Authority of lndia Limited, Rural Electrification Corporation Limited, Oil India Ltd.

Conclusion

• The classification of Central Public Sector Enterprises (CPSEs) into categories such as Maharatna, Navratna, and Miniratna plays a crucial role in delegating powers effectively. 
• These designations not only signify the stature of the CPSEs but also determine their autonomy and decision-making capabilities, ultimately contributing to their operational efficiency and strategic management.