Difference Between Maharatna and Navratna Status for PSE

Maharatna vs Navratna Status for PSE

The title of Navratna was initiated by the government of India in 1997 to recognize and appreciate the efforts of public sector companies that were doing exceedingly well. The concept of Navratna came from 9 gems in the courts of maharaja Vkramaditya and later Emperor Ashoka, who were scholars par excellence and greatly helped the king in administration through their wisdom. At a time, when PSE’s were being criticized for being non competitive and performing poorly in comparison to private sector companies, this was the highest award and reward a PSE could get. Since then, the number of companies getting the status of Navratna has been increased to 16. Maharatna is the latest honor constituted to pick out the best of the best, which implies that maharatna are the companies that have already been granted the status of Navratna. Let us find out the difference between Maharatna and Navratna.

Navratna

Navratna was the top honor conferred on public sector enterprises till recently in the country. On six chosen parameters, a company getting a score of 60 out of 100 on each of these parameters, qualifies to be conferred the title of a Navratna. The title does not just add to prestige and status of the PSE, it also allows greater autonomy, both financial and operational, to the company. The company gets automatic permission to invest up to Rs. 1000 crores or 15% of their net worth on a project without seeking prior approval from the government. In fact, Navratna companies can spend up to 30% of their net worth (but less than Rs. 1000 crore) without approval from the government.

Maharatna

There was a time when there were very few public sector companies doing well. But today the situation has changed dramatically, many PSE’s are doing exceedingly well prompting the government to increase the number of Navratnas from the customary 9 to 15. Even among Navratnas, the best are chosen to confer the title of Maharatna. The status of Maharatna allows a PSE to make foreign investments up to Rs. 5000 crores without seeking government approval. To get to the status of Maharatna, a Navratna must have an annual profit of more than 5000 crores, a net worth of Rs. 15000 crores, and a turnover of Rs. 25,000 crores in the last three years.

In India, there are just 4 companies that have been conferred the title of Maharatna, and they are IOCL, NTPC, ONGC, and SAIL.

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