Navratna Status for IRCTC and IRFC

The Indian Railway Catering and Tourism Corporation (IRCTC) and Indian Railway Finance Corporation (IRFC) have been upgraded to Navratna status, becoming the 25th and 26th such designated companies in India, respectively. This upgrade means all seven listed Central Public Sector Enterprises (CPSEs) of the Indian Railways now hold Navratna status. The Indian Railways administers a total of 12 CPSEs.

Criteria for Navratna Status

• Navratnas are central government-owned companies, positioned between Maharatnas and Miniratnas.
• Criteria include profitability, net worth, earnings, and inter-sectoral performance.
• Six indicators used for assessment include:
  • Ratio of net profit to net worth.
  • Ratio of manpower cost to total cost of production or services.
  • Ratio of profit before depreciation, interest, and tax (PBDIT) to capital employed.
  • Ratio of profit before interest and taxes (PBIT) to turnover.
  • Earnings per share.
  • Inter-sectoral performance.
• These indicators carry weights ranging from 10 to 25.
• A composite score of 60 or higher and an Excellent or Very Good MOU rating in three of the last five years are required for eligibility.

Benefits of Navratna Status

• Financial autonomy, allowing investment up to Rs 1,000 crore or 15% of net worth in a single project without government approval.
• Ability to form joint ventures, subsidiaries, and engage in mergers or acquisitions without direct government intervention.
• Empowered to make independent business and investment decisions to compete with private sector companies.
• Capability to enter international markets and form strategic alliances.
• Attracts more investors due to perceived financial stability.

Other Navratna Companies of Indian Railways

• Container Corporation of India (CONCOR)
• Rail Vikas Nigam Ltd (RVNL)
• RITES Ltd
• IRCON International Ltd
• RailTel Corporation of India Ltd