Navratna Scheme: Eligibility Criteria For Grant of Navaratna Scheme

NAVRATNA SCHEME
The Government introduced the Navratna scheme in July, 1997 to

identify and delegate enhanced powers to CPSEs having
comparative advantage and the potential to become global players.
Navratna was the title given originally to 9 Public Sector Enterprises
(PSEs) identified by the Government of India in 1997 as "public
sector companies that have comparative advantages", giving them
greater autonomy to compete in the global market so as to "support
[them] in their drive to become global giants"
Eligibility Criteria for Grant of Navaratna Scheme
As per the criteria laid down by the Government, Miniratna

Category – 1 and Schedule ‘A’ CPSEs, which have obtained
‘excellent’ or ‘very good’ rating under the Memorandum of
Understanding system in three of the last five years, and have a
composite score of 60 or above in the six selected performance
parameters are eligible to be considered for grant of Navratna status.
Delegation of Powers to Navratna CPSEs
The powers delegated to the Boards of Navratna CPSEs are as

under: -(i) Capital Expenditure :- The Navratna CPSEs have the
powers to incur capital expenditure on purchase of new items or for
replacement, without any monetary ceiling.
(ii) Technology Joint Ventures and Strategic Alliances:-The

Navratna CPSEs have the powers to enter into technology joint
ventures or strategic alliances and obtain, by purchase or other
arrangements, technology and know-how.
(iii) Organization Restructuring:- The Navratna CPSEs have the

powers to effect organizational restructuring including
establishment of profit centers, opening of offices in India and
abroad, creating new activity centers, etc.
(iv) Human Resources Management:- The Navratna CPSEs have
been empowered to create and wind up all posts up to E-6 level and
make all appointments up to this level. The Boards of these CPSEs
have further been empowered to effect internal transfers and re-
designation of posts. The Board of Directors of Navratna CPSEs
have the power to further delegate the powers relating to Human
Resource Management (appointments, transfer, posting, etc.) of
below Board level executives to subcommittees of the Board or to
executives of the CPSE,
as may be decided by the Board of the CPSE.
v) Resource Mobilization: - These CPSEs have been empowered to

raise debt from the domestic capital markets and for borrowings
from international market, subject to condition that approval of
RBI/Department of Economic Affairs, as may be required, should
be obtained through the administrative Ministry.
(vi) Joint ventures and Subsidiaries:- The Navratna CPSEs have

been delegated powers to establish financial joint ventures and
wholly owned subsidiaries in India or abroad with the stipulation
that the equity investment of the CPSE should be limited to the
following:
-i. Rs. 1000 crore in any one project,
ii. 15% of the net worth of the CPSE in one project,
iii. 30% of the net worth of the CPSE in all joint ventures/
subsidiaries put together.
(vii) Mergers and acquisitions:- The Navratna CPSEs have been

delegated powers for mergers and acquisitions subject to the
conditions that (i) it should be as per the growth plan and in the core
area of functioning of the CPSE, (ii) conditions/limits would be as
in the case of establishing joint ventures/subsidiaries, and (iii) the
Cabinet Committee on Economic Affairs would be kept informed in
case of investments abroad. Further, the powers relating to Mergers
and Acquisitions are to be exercised in such a manner that it should
not lead to any change in the public sector character of the concerned
CPSEs.
(viii) Creation/Disinvestment in subsidiaries:- The Navratna

CPSEs have powers to transfer assets, float fresh equity and divest
shareholding in subsidiaries subject to the condition that the
delegation will be in respect of subsidiaries set up by the holding
company under the powers delegated to the Navratna CPSEs and
further to the proviso that the public sector character of the
concerned CPSE (including subsidiary) would not be changed
without prior approval of the Government and such Navratna
CPSEs will be required to seek Government approval before exiting
from their subsidiaries.
(ix) Tours abroad of functional Directors: - The Chief Executive of

Navratna CPSEs have been delegated powers to approve business
tours abroad of functional directors up to 5 days’ duration (other
than study tours, seminars, etc.) in emergency under intimation to
the Secretary of the administrative Ministry. The above mentioned
delegation of powers is subject to the following conditions and
guidelines:-
(a) The proposals must be presented to the Board of Directors

in writing and reasonably well in advance, with an analysis
of relevant factors and quantification of the anticipated
results and benefits. Risk factors if any, must be clearly
brought out.
(b)
The Government Directors, the Financial Directors and the
concerned Functional Director(s) must be present when major
decisions are taken, especially when they pertain to investments,
expenditure or organizational/ capital restructuring.
(c) The decisions on such proposals should, preferably, be
unanimous.
(d) In the event of any decision on important matters not being
unanimous, a majority decision may be taken, but at least two thirds
of the Directors should be present, including those mentioned in (b)
above, when such a decision is taken. The objections, dissents, the
reasons for over-ruling them and those for taking the decision should
be recorded in writing and minuted.
(e) No financial support or contingent liability on the part of the

Government should be involved.
(f) These CPSEs will establish transparent and effective systems of

internal monitoring, including the establishment of an Audit
Committee of the Board with membership of non-official Directors.
(g) All the proposals, where they pertain to capital expenditure,

investment or other matters involving substantial financial or
managerial commitments or where they would have a long term
impact on the structure and functioning of the CPSE, should be
prepared by or with the assistance of professionals and experts and
should be appraised, in suitable cases, by financial institutions or
reputed professional organizations with expertise in the areas. The
financial appraisal should also preferably be backed by an
involvement of the appraising institutions through loans or equity
participation.
(h) The exercise of authority to enter into technology joint ventures

and strategic alliances shall be in accordance with the Government
guidelines as may be issued from time to time.
(i) The Boards of these CPSEs should be restructured by

inducting at least four non-official Directors as the first
step before the exercise of the enhanced delegation of
authority.
(ii)
(j) These public sector enterprises shall not depend upon budgetary
support or Government guarantees. The resources for implementing
their programmes should come from their internal or through other
sources, including the capital markets. However, wherever
Government guarantee is required under the standard stipulations
of external donor agencies, the same may be obtained from the
Ministry of Finance through the administrative Ministry. Such
Government guarantee shall not affect the Navratna status. Further,
budgetary support to implement Government sponsored projects of
national interest and Government sponsored Research &
Development projects will not disqualify CPSEs from retaining
their Navratna status. However, for such projects, investment
decisions will be taken by the Government and not by the CPSE
concerned.
Presently, there are 17 Navratna CPSEs as on 31.3.2017

(i) Container Corporation of India Limited,
(ii) Bharat Electronics Limited,
(iii) (iii) BharatPetroleum Corporation Limited,
(iv) Engineers India Limited
(v) Hindustan Aeronautics Limited,
(vi) Hindustan Petroleum Corporation Limited,
(vii) Mahanagar Telephone Nigam Limited,
(viii) National Aluminium Company Limited,
(ix) National Buildings Construction Corporation Limited,
(x) Neyveli Lignite Corporation Limited,
(xi) NMDC Limited,
(xii) Oil India Limited,
(xiii) Power Finance Corporation Limited
(xiv) Power Grid Corporation of India Limited,
(xv) Rashtriya Ispat Nigam Limited,
(xvi) Rural Electrification Corporation Limited
(xvii) Shipping Corporation of India Limited.

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NAVRATNA SCHEME

The Government introduced the Navratna scheme in July, 1997 to

Eligibility Criteria for Grant of Navaratna Scheme

As per the criteria laid down by the Government, Miniratna

Delegation of Powers to Navratna CPSEs

The powers delegated to the Boards of Navratna CPSEs are as

(ii) Technology Joint Ventures and Strategic Alliances:-The

(iii) Organization Restructuring:- The Navratna CPSEs have the

v) Resource Mobilization: - These CPSEs have been empowered to

(vi) Joint ventures and Subsidiaries:- The Navratna CPSEs have

-i. Rs. 1000 crore in any one project,

ii. 15% of the net worth of the CPSE in one project,

(vii) Mergers and acquisitions:- The Navratna CPSEs have been

(viii) Creation/Disinvestment in subsidiaries:- The Navratna

(ix) Tours abroad of functional Directors: - The Chief Executive of

(a) The proposals must be presented to the Board of Directors

(e) No financial support or contingent liability on the part of the

(f) These CPSEs will establish transparent and effective systems of

(g) All the proposals, where they pertain to capital expenditure,

(h) The exercise of authority to enter into technology joint ventures

(i) The Boards of these CPSEs should be restructured by

Presently, there are 17 Navratna CPSEs as on 31.3.2017

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