What is Miniratna Scheme?

July 25, 2023

The ‘Miniratna’ is a status given by the central government to select Public Sector Enterprises, that have attained better performance and strength and the government provides more financial power and autonomy to these Miniratnas to make them more competitive and efficient.

The Miniratnas form a vital categorization within the broader ‘Ratna’ scheme, which also encompasses the designations of Navratnas and Maharatnas. The core objective of the Ratna scheme is to furnish select CPSEs with autonomy and other incentives. This strategic move aims to drive enhancements in the performance and efficiency of these enterprises.

In summary, the ‘Miniratna’ status serves as an emblem of achievement for deserving Public Sector Enterprises, receiving greater financial empowerment and freedom from the government. As part of the overarching ‘Ratna’ scheme, this approach seeks to promote excellence and efficiency within the selected CPSEs.

Backgrounder to Miniratna status

The government initially categorized Public Sector Enterprises (PSEs) based on their economic importance and complexities, resulting in four categories – A, B, C, and D, during the early planning era. However, with the introduction of Economic Reforms, the government recognized the need to grant greater autonomy and flexibility to certain CPSEs. To achieve this objective, the Ratna categorization system (Navratna, Miniratna, Maharatna) was introduced. Notably, after the implementation of the New Industrial Policy in 1991, the government has consistently made efforts to enhance the competitiveness and efficiency of PSEs.

As part of this strategy, the government devised a special status mechanism for CPSEs, taking into account their performance, competitiveness, and size. One of the first major initiatives was the establishment of the Navratna status in 1997 (including Miniratnas). Subsequently, the introduction of the Maharatna status in 2010 further expanded the categorization. The Navratna scheme aimed to identify CPSEs with comparative advantages and provide them with necessary support to attain global recognition and competitiveness.

The need for categorisation under the Ratna scheme and government support to PSEs was necessitated with the change in their operational environment. With economic reforms, an important concern for the government was to reform the PSEs so that they can remain competitive. For that, the government decided to grant more freedom and autonomy, assigning more financial powers etc. to select CPSEs, so that their performance can be improved. The Miniratna categorisation was launched in October 1997. Miniratnas were identified in terms of thier opeartional features, size etc.

Eligibility criteria for Miniratna

The Miniratana are divided under two categories – Category -I and Category -II and the following are their eligibility criteria.

(i) Category-I CPSEs:

Continuous profit in the last three years,
A pre-tax profit of Rs.30 crores or more in at least one of the three years and
Positive net worth.

(ii) Category-II CPSEs:

Profit for the last three years continuously and besides having a positive net worth.

(iii) They should have not defaulted in the repayment of loans/interest payment on any loans due to the Government. These CPSEs will be eligible for enhanced delegated powers.

(iv) The PSEs shall not depend upon budgetary support or Government guarantees.

As a first step to delegate more authority, the Boards of these CPSEs should be restructured by brining least three non-official Directors.

The concerned administrative Ministry will decide whether a PSE meets the requirement to be classified as Category-I or Category-II.

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