Public Sector Undertakings - PSUs in India, Maharatna, Navratna and Miniratna

Public Sector Undertakings, or PSUs, are government-owned businesses in India. They may be owned by the Indian union government or one of the numerous state governments. In India, PSUs or public sector undertakings are very important factors that contribute to the country's economic development. These are the corporations in which the Government of India owns a considerable paid share capital or at least 51%.

Classification of the Public Sector Organizations

The public sector can be categorized as follows:

Departmental Undertaking: Directly controlled by the relevant ministry or division. (Railways, Post Office, etc.)
Non-Departmental Undertaking - PSU (e.g. HPCL, IOCL, etc.)
Monetary institution (e.g. SBI, UTI, LIC, etc.)

Industrialization and developing capital goods and basic industries were the driving forces behind the creation of PSUs. Organizations that do not fall within the public sector are referred to as the private sector, and they strive to increase their profits.

The Department of Public Enterprises has granted CPSEs the rank of Maharatna, Navratna, or Miniratna, depending on their financial performance and advancement.

1. Maharatna status

This is the greatest status a government-owned business may attain. The Board of a ‘Maharatna’ CPSE can make equity investments to undertake financial joint ventures and wholly-owned subsidiaries and undertake mergers and acquisitions in India and abroad, subject to a ceiling of 15% of the Net Worth of the concerned CPSE, limited to ₹5,000 crores in one project.

Criteria for Maharatna PSU

According to the guidelines released by the Department of Public Enterprises, the CPSEs meeting the following criteria are eligible to be considered for a grant of Maharatna status.

Having Navratna status
Listed on Indian stock exchange with minimum prescribed public shareholding under SEBI regulations
An average annual turnover of more than Rs. 25,000 crore during the last 3 years
An average annual net worth of more than Rs. 15,000 crore during the last 3 years
An average annual net profit after tax of more than Rs. 5,000 crore during the last 3 years
Should have significant global presence/international operations.

List of Maharatna PSU companies in India

(Source: Department of Public Enterprises, Ministry of Finance as on March 2023)

Bharat Heavy Electricals limited
Bharat Petroleum Corporation Limited
Coal India Limited
GAIL (India) Limited
Hindustan Petroleum Corporation Limited
Indian Oil Corporation Limited
NTPC Limited
Oil & Natural Gas Corporation Limited
Power Finance Corporation
Power Grid Corporation of India Limited
Steel Authority of India Limited
REC Limited
Oil India Limited

2. Navratna status

Companies holding the status of "Navratna" must be Miniratna Category-I firms with Schedule A status to qualify. Additionally, it must have a composite score of 60 or above in the following six selected performance indicators to be considered for a grant of Navratna status.

Performance indicators	Weightage (Maximum 100)
Net Profit to Net worth	25
Manpower Cost to total Cost of Production or Cost of Services	15
Profit Before Depreciation Interest and Taxes (PBDIT) to Capital employed	15
Profit Before Interest and Tax (PBIT) to Turnover	15
Earning Per Share	10
Inter Sectoral Performance	20

List of Navratna Public Sector Companies

(Source: List by Department of Public Enterprises as on March 2023)

Bharat Electronics Limited
Container Corporation of India Limited
Engineers India Limited
Hindustan Aeronautics Limited
Mahanagar Telephone Nigam Limited
National Aluminium Company Limited
National Buildings Construction Corporation Limited
NMDC Limited
Neyveli Lignite Corporation Limited
Rashtriya Ispat Nigam Limited
Shipping Corporation of India Limited
ONGC Videsh

3. Miniratna status

This subcategory of CPSEs also includes the following two subtypes:

Miniratna Category-I

The companies must have made a profit in the previous three years, with at least one of those years seeing a pre-tax profit of 30 crores or more.

List of Miniratna Category – I companies

(Source: List by Department of Public Enterprises as on March 2023)

Airports Authority of India
Antrix Corporation Limited
Balmer Lawrie & Co. Limited
Bharat Coking Coal Limited
Bharat Dynamics Limited
BEML Limited
Bharat Sanchar Nigam Limited
Braithwaite & Company Limited
Bridge & Roof Company (India) Limited
Central Warehousing Corporation
Central Coalfields Limited
Central Mine Planning & Design Institute Limited
Chennai Petroleum Corporation Limited
Cochin Shipyard Limited
Cotton Corporation of India Ltd.
EdCIL (India) Limited
Garden Reach Shipbuilders & Engineers Limited
Goa Shipyard Limited
Hindustan Copper Limited
Hindustan Steelworks Construction Limited
HLL Lifecare Limited
Hindustan Paper Corporation Limited
Housing & Urban Development Corporation Limited
HSCC (India) Limited
India Tourism Development Corporation Limited
Indian Rare Earths Limited
Indian Railway Catering & Tourism Corporation Limited
Indian Railway Finance Corporation Limited
Indian Renewable Energy Development Agency Limited
India Trade Promotion Organization
IRCON International Limited
KIOCL Limited
Mazagaon Dock Shipbuilders Limited
Mahanadi Coalfields Limited
MOIL Limited
Mangalore Refinery & Petrochemical Limited
Mineral Exploration Corporation Limited
Mishra Dhatu Nigam Limited
MMTC Limited
MSTC Limited
National Fertilizers Limited
National Projects Construction Corporation Limited
National Small Industries Corporation Limited
National Seeds Corporation
NHPC Limited
Northern Coalfields Limited
North Eastern Electric Power Corporation Limited
Numaligarh Refinery Limited
Pawan Hans Helicopters Limited
Projects & Development India Limited
Railtel Corporation of India Limited
Rashtriya Chemicals & Fertilizers Limited
RITES Limited
SJVN Limited
Security Printing and Minting Corporation of India Limited
South Eastern Coalfields Limited
Solar Energy Corporation of India Limited
Telecommunications Consultants India Limited
THDC India Limited
Western Coalfields Limited
WAPCOS Limited

Miniratna Category-II

The businesses must have a positive net worth and have generated profits consistently during the last three years. These businesses are permitted to spend up to 50% of their net value without seeking permission from the government. Miniratna CPSEs shall not depend upon budgetary support or Government guarantees.

List of Miniratna Category – II

(Source: List by Department of Public Enterprises as on March 2023)

Artificial Limbs Manufacturing Corporation of India
Bharat Pumps & Compressors Limited
Broadcast Engineering Consultants India Limited
Engineering Projects (India) Limited
FCI Aravali Gypsum & Minerals India Limited
Ferro Scrap Nigam Limited
HMT (International) Limited
Indian Medicines & Pharmaceuticals Corporation Limited
MECON Limited
National Film Development Corporation Limited
Rajasthan Electronics & Instruments Limited

Note: There are 74 Miniratna Central Public Sector Enterprises (CPSEs) at present in the country.

4. Goals of Establishing a Public Sector Unit (PSU)

To establish a national industrial base
To create more high-quality employment
To build up the nation's fundamental infrastructure
To provide the government with resources
To encourage exporters while lowering imports
To hasten a nation's economic development and prosperity while reducing inequality.

5. New Public Sector Enterprise (“PSE”) Policy

A new Public Sector Enterprise (PSE) Policy has been notified by the government in February 2021. The policy aims to minimize the presence of the Government in the PSEs across all sectors of the economy. Under the new PSE Policy, public sector commercial enterprises are being classified as Strategic and Non-Strategic sectors.

Strategic sectors: In Strategic sectors, the bare minimum presence of the existing public sector commercial enterprises at the Holding Company level is to be retained under Government control. The remaining enterprises in a strategic sector are to be privatized or merged with another PSE or closed. Four strategic sectors have been identified based on the criteria of national security, energy security, critical infrastructure, provision of financial services and availability of important minerals. These strategic sectors include
- Atomic Energy, Space and Defense
- Transport and Telecommunication
- Power, Petroleum, Coal and other minerals
- Banking, Insurance and Financial Services
Non-strategic sectors: PSEs in non-strategic sectors are to be considered for privatization, where feasible, otherwise such enterprises are to be considered for closure.

PSUs are essential to the prosperity and development of the country. The number of PSUs has been falling for many years for various reasons. For various reasons, some businesses cannot be transferred to the private sector. In such a situation, Government is right in bringing out new Public Sector Enterprise (PSE) Policy.