Miniratna status

Indian Economy glossary

Also called: Miniratna · Topic: Industrial Policy, Public Sector, MSMEs and Disinvestment · NCERT: Beyond NCERT

Meaning

Miniratna status is given to profit-making central public sector enterprises (CPSEs). It gives them some freedom to invest without taking every decision to the ministry. It has two categories:

  • Category I: 3 years of continuous profit, a pre-tax profit of at least Rs 30 crore in at least one of those years, and positive net worth. Net worth is what the firm owns minus what it owes. The board can approve projects of up to Rs 500 crore.
  • Category II: continuous profit for 3 years and positive net worth. The board can approve projects of up to Rs 300 crore.

Miniratna is the first step of the Ratna ladder. Above it come Navratna and Maharatna. The aim is to let good PSEs act quickly and compete.

Example

A CPSE that has made a profit for 3 straight years, earned a pre-tax profit of Rs 40 crore in one of them, and has positive net worth can become a Miniratna Category I. Its board can then approve a Rs 450 crore expansion on its own.

Don't confuse with

  • Navratna/Maharatna: These are higher tiers. A Navratna board can approve up to Rs 1,000 crore or 15% of net worth. A Maharatna board can approve up to Rs 5,000 crore or 15% of net worth.

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