Context: The Government of India has recently granted Navratna status to the Indian Railway Catering and Tourism Corporation (IRCTC) and Indian Railway Finance Corporation (IRFC), making them the 25th and 26th Navratna Central Public Sector Enterprises (CPSEs) in India.
Understanding Navratna Status
What is Navratna Status?
Navratna Status is a prestigious classification conferred upon high-performing CPSEs that demonstrate excellence in financial and operational performance. The status grants greater autonomy in investment and decision-making, allowing firms to compete effectively on a global scale.
Who Grants Navratna Status?
The Department of Public Enterprises (DPE) under the Ministry of Finance is responsible for awarding Navratna status to eligible CPSEs based on specific performance criteria.
Eligibility Criteria for Navratna Status
To qualify for Navratna status, a CPSE must:
Be a Miniratna-I CPSE with a positive net worth.
Secure an Excellent or Very Good MoU rating in at least three of the last five years.
Score 60+ points on key financial indicators, including net profit, net worth, and manpower cost.
Have at least four independent directors on its board.
Benefits of Navratna Status
Investment Autonomy: Navratna CPSEs can invest up to ₹1,000 crore or 15% of their net worth without requiring government approval.
Expansion and Diversification: They can form joint ventures, subsidiaries, and global alliances.
Increased Market Credibility: The status enhances investor confidence and fosters strategic partnerships, driving business growth.
About IRCTC and IRFC
Indian Railway Catering and Tourism Corporation (IRCTC)
What is IRCTC?
IRCTC is a public sector enterprise providing ticketing, catering, and tourism services for Indian Railways.
Establishment and Ministry
Established in: 1999
Operates under: Ministry of Railways, Government of India
Key Functions of IRCTC
E-Ticketing: Manages online train reservations via its website and mobile apps.
Catering Services: Operates onboard catering and manages railway food plazas.
Tourism Services: Provides rail-based tourism packages, including luxury trains like Maharajas’ Express.
Rail Neer: Manufactures and supplies packaged drinking water to railway passengers.
Indian Railway Finance Corporation (IRFC)
What is IRFC?
IRFC is a public sector undertaking (PSU) responsible for raising financial resources to support the modernization and expansion of Indian Railways.
Establishment and Ministry
Established in: 12 December 1986
Operates under: Ministry of Railways, Government of India
Key Functions of IRFC
Funding Indian Railways: Provides low-cost capital for railway expansion projects.
Market Borrowings: Raises funds through bonds, external borrowings, and public offerings.
Rolling Stock Leasing: Finances the procurement of locomotives, coaches, and wagons.
Infrastructure Development: Supports the modernization and electrification of railway networks.
Conclusion
Granting Navratna status to IRCTC and IRFC strengthens India’s public sector enterprises, enhancing their financial autonomy and global competitiveness. By fostering investment, innovation, and operational efficiency, these companies play a crucial role in India’s economic development and infrastructure growth.
MCQs for UPSC CSE
Which department grants Navratna status to CPSEs? a) Ministry of Railways
b) Department of Public Enterprises (DPE)
c) Reserve Bank of India
d) NITI Aayog
Answer: b) Department of Public Enterprises (DPE)What is the minimum net worth required for a CPSE to qualify for Navratna status? a) ₹500 crore
b) ₹1,000 crore
c) Positive net worth
d) ₹10,000 crore
Answer: c) Positive net worthWhich of the following is NOT a function of IRCTC? a) E-Ticketing
b) Catering Services
c) Rail Neer production
d) Railway track maintenance
Answer: d) Railway track maintenanceWhen was IRFC established? a) 1999
b) 2005
c) 1986
d) 2010
Answer: c) 1986
Mains Question
Q: Explain the significance of Navratna status in enhancing the financial and operational efficiency of CPSEs in India. Discuss its impact on investment, economic growth, and infrastructure development.
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