Central Public Sector Undertakings : Policy Wise

[pib] Maharatna status accorded to Power Finance Corporation Ltd (PFC)


From UPSC perspective, the following things are important :

Prelims level: Central Public Sector Enterprises, Its categories

Mains level: Profit making CPSEs

The Centre has accorded ‘Maharatna’ status to the state-owned Power Finance Corporation Ltd (PFC), thus giving PFC greater operational and financial autonomy.

About PFC Ltd.

  • Power Finance Corporation Ltd. (PFC) is an Indian financial institution under the ownership of Ministry of Power.
  • Established in 1986, it is the financial backbone of Indian Power Sector.
  • PFC is the 8th highest profit making Central Public Sector Enterprise (CPSE) as per the Department of Public Enterprises Survey for FY 2017–18.
  • It is India’s largest NBFC and also India’s largest infrastructure finance company.

Benefits of Maharatna Status

  • This new status will enable PFC to offer competitive financing for the power sector, which will go a long way in making available affordable & reliable ‘Power For All 24×7’.
  • This will also impart enhanced powers to the PFC Board while taking financial decisions.
  • It can make equity investments to undertake financial joint ventures and wholly-owned subsidiaries and undertake mergers and acquisitions in India and abroad.
  • It can also structure and implement schemes relating to personnel and Human Resource Management and Training.
  • It can also enter into technology Joint Ventures or other strategic alliances among others.

Back2Basics: Central Public Sector Enterprises

  • The CPSEs are run by the Government under the Department of Public Enterprises of Ministry of Heavy Industries and Public Enterprises.
  • The government grants the status of Navratna, Miniratna and Maharatna to them based upon the profit made by these CPSEs.
  • The Maharatna category has been the most recent one since 2009, other two have been in function since 1997.


Maharatna Navratna Miniratna Category-I Miniratna Category-II
Eligibility Three years with an average annual net profit of over ₹2,500 crore


Average annual Net worth of ₹10,000 crore for 3 years


Average annual Turnover of ₹20,000 crore for 3 years


A score of 60 (out of 100), based on six parameters which include net profit, net worth, total manpower cost, total cost of production, cost of services, PBDIT (Profit Before Depreciation, Interest and Taxes), capital employed, etc.,


A company must first be a Miniratna and have 4 independent directors on its board before it can be made a Navratna

Have made profits continuously for the last three years or earned a net profit of ₹30 crore or more in one of the three years Have made profits continuously for the last three years and should have a positive net worth.
Benefits for investment ₹1,000 crore – ₹5,000 crore, or free to decide on investments up to 15% of their net worth in a project  

Up to ₹1,000 crore or 15% of their net worth on a single project or 30% of their net worth in the whole year

Up to ₹500 crore or equal to their net worth, whichever is lower Up to ₹300 crore or up to 50% of their net worth, whichever is lower



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