Centre grants 'navratna' status to IRCTC and IRFC: What does it mean?

Public sector undertakings Indian Railway Catering and Tourism Corporation (IRCTC) and Indian Railway Finance Corporation (IRFC) were granted 'Navratna' status by the Government of India on Monday (March 3).

 

A post on X by the Department of Public Enterprises stated that the government has approved the elevation of IRCTC and IRFC to Navratna CPSEs, making them the 25th and 26th 'Navratnas' among Central Public Sector Enterprises (CPSEs).

 

“IRCTC is a Ministry of Railways CPSE with an annual turnover of Rs 4,270.18 crore, PAT of Rs 1,111.26 crore and a net worth of Rs 3,229.97 crore for FY 2023-24,” said the department in its post.  

 

Another post highlighted that “IRFC is a Ministry of Railways CPSE with an annual turnover of Rs 26,644 crore, PAT of Rs 6,412 crore and a net worth of Rs 49,178 crore for FY 2023-24.”  

 

Minister of Railways Ashwini Vaishnaw also took to X to congratulate both organisations on achieving this milestone. “Congratulations to team IRCTC and team IRFC on being upgraded to Navratna status,” he said.

 

What is ‘Navratna’ status?  

 

Navratna status is conferred upon public sector undertakings that demonstrate outstanding financial and market performance. This recognition enhances their autonomy and financial authority.

 

A key advantage of this status is that the companies can invest up to Rs 1,000 crore or 15 per cent of their net worth in a single project without needing prior approval from the central government.

 

Furthermore, it enables them to independently establish partnerships, create subsidiaries, and enter into joint ventures.

 

The Centre classifies CPSEs into three categories based on their financial performance and operational capabilities — Maharatna, Navratna, and Miniratna. Companies that fulfill specific financial and performance benchmarks are granted 'Navratna' status, providing them with greater autonomy in investment and expansion decisions.

 

What are the benefits of 'Navratna' status?

 

- Companies can invest up to Rs 1,000 crore or 15 per cent of their net worth in a single project without requiring prior government approval  

 

- They gain flexibility to expand operations and explore new business opportunities more efficiently

 

- They have greater independence in forming joint ventures and entering into technology or marketing agreements

 

The objective of this status is to enhance the competitiveness and self-sufficiency of public sector enterprises.