Syllabus: GS3/ Economy
Context
- The Union Government has granted Navratna status to Indian Railway Catering and Tourism Corporation (IRCTC) and Indian Railway Finance Corporation (IRFC), making them the 25th and 26th Navratna CPSEs (Central Public Sector Enterprises) in India.
About Navratna Status
- Navratna is a prestigious classification awarded to high-performing CPSEs, providing them with greater investment autonomy and operational flexibility.
- The Department of Public Enterprises (DPE) under the Ministry of Finance grants Navratna status to eligible CPSEs.
- Eligibility Criteria for Navratna Status: Be a Miniratna-I CPSE with a positive net worth.
- Achieve an “Excellent” or “Very Good” MoU rating in at least three of the last five years.
- Score 60+ points on key financial indicators such as net profit, net worth, and manpower cost.
- Have at least four independent directors on its board.
Benefits of Navratna Status to Firms
- Enhanced Financial Autonomy: They can invest up to ₹1,000 crore or 15% of their net worth without government approval.
- Operational Freedom: Increased flexibility in forming strategic alliances, joint ventures, and subsidiaries at domestic and international levels.
- Increased Market Credibility: Strengthens corporate reputation, making the company more attractive to investors, partners, and financial institutions.
- Strategic Decision-Making: More power in capital expenditure, mergers, acquisitions, and human resource management.
| Indian Railway Catering and Tourism Corporation (IRCTC) – About: 1. IRCTC is a public sector enterprise that provides ticketing, catering, and tourism services for Indian Railways. – Establishment & Ministry: 1. Established: 1999 2. Operates under: Ministry of Railways, Government of India About Indian Railway Finance Corporation (IRFC) – About: 1. IRFC is the dedicated financing arm of the Indian Railways. Its primary purpose is to raise funds from both domestic and overseas capital markets. – Administrative Control: 1. Ministry of Railways, Government of India. – Working: 1. It operates as a Systemically Important Non-Deposit taking Non Banking Financial Company (NBFC – ND-SI) and Infrastructure Finance Company (NBFC-IFC) registered with the Reserve Bank of India (RBI). 2. Its core business model involves borrowing funds and then leasing assets to Indian Railways. |
Source: ET
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