The Daily Brief How India’s PSUs are classified
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Apr 7, 2026 A tour of how public sector companies are ranked into Mini‑Ratna, Navaratna and Maharatna tiers and why those labels matter for autonomy and investment. A look at the historical push‑and‑pull between state control and liberalisation. An examination of GST design flaws that break the input tax credit chain and the policy trade‑offs for refunds and compliance.
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Ratna System Is A Trust Meter For PSUs
- The Ratna classification measures how much operational autonomy PSUs get to invest, borrow and expand without ministerial approval.
- It was introduced as a middle path between full privatization and heavy ministry control, dating back to reforms in the 1990s and upgraded tiers in 2010.
Higher Ratna Tiers Grant Bigger Capex Freedom
- Mini, Navaratna and Maharatna tiers grant incrementally larger capex and transaction autonomy tied to financial thresholds and MOU ratings.
- Examples: mini-ratna capex up to Rs 250–500 crore, Navratna up to Rs 1,000 crore and Maharatna up to Rs 5,000 crore or 15% of net worth.
MTNL Shows Autonomy Can't Cure Structural Failure
- MTNL kept Navaratna status while becoming a major failure, showing autonomy couldn't fix structural limits like technology lag and restricted geography.
- In FY24 MTNL lost over Rs 3,300 crore and held ~Rs 34,500 crore liabilities despite its status.