Definition
Maharatna, Navratna, Miniratna
These are categories of central public sector enterprises granted increasing levels of financial and operational autonomy based on their size and performance.
The government classifies profitable CPSEs into tiers. Maharatna status, the highest, goes to very large, consistently profitable, globally competitive firms and gives boards the greatest freedom to invest and form ventures. Navratna firms get substantial autonomy, while Miniratna companies, split into two categories, get more limited but still meaningful delegated powers.
The ranking lets well-run PSUs take investment, joint-venture and expansion decisions without seeking government approval at every step, within prescribed ceilings. Promotion through these tiers is a recognition of scale and performance and a tool to make state enterprises more nimble.
Related terms
- DisinvestmentDisinvestment is the sale by the government of part or all of its stake in a public sector enterprise to raise resources or improve efficiency.
- Strategic SaleA strategic sale is disinvestment in which the government sells a controlling stake in a public sector firm together with management control to a private buyer.
- PSU (Public Sector Undertaking)A Public Sector Undertaking is a company in which the central or state government holds a majority stake, operating in areas from energy to banking.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.