Navratna status

03.05.2024

Navratna status

   Why in the news?                          

Recently, the Indian Renewable Energy Development Agency public sector undertaking company was granted ‘Navratna status' from the department of public enterprises.

Key Points

• IREDA Navratna Status is an initiative introduced by the government of India.
• IREDA, also referred to as the Indian Renewable Energy Development Agency, was introduced in 1987.
• The initiative plays an essential role in promoting and financing renewable energy projects throughout India.
• The Indian government awarded and introduced IREDA the respected Navratna status in appreciation and honor of its exceptional performance and strategic development or significance in the country’s energy sector.
• It is very beneficial and did many good things for the country mainly in its energy sector.
• The initiative is very beneficial for the citizens of India as well.
• In addition to recognizing and appreciating IREDA’s earlier success and accomplishments, this status gives it the ability and opportunity to control the coming future of renewable energy in India and that too with more courage, dynamically, and ambitiously.

Navratna status

• It is a category of Central Public Sector Enterprise (CPSE) which meets certain operational and financial eligibility based on net profit, the total cost of production, earnings per share and inter-sectoral performance.
• These are a set of public sector companies that possess financial autonomy to invest up to 1000 crores without any approval from the central government.
• Navratna status was first allotted to 9 public sector enterprises in 1997.

Criteria for Navratna status

• A PSU should be a Miniratna-I, Schedule 'A Company, should have obtained an 'excellent' or 'very good' MoU rating in three of the last five years, and must have a composite score of 60 in six performance indicators.
• It must report a net profit of more than Rs 5,000 crore for three consecutive years, and maintain an average annual turnover of Rs 25,000 crore for three years, or have an annual average net worth of over Rs 15,000 crore for three years.

Benefits

•  They invest up to ₹1,000 crore without seeking approval from the central government.
• These companies are also allowed to invest up to 15% of their net worth on a single project, or 30% of their net worth in a given year, subject to a cap of ₹1,000 crore.
• To incur capital expenditure on purchase of new items or for replacement, without any monetary ceiling.
• To enter into technology joint ventures or strategic alliances

                                                      Source: Live Mint