Consider the following statements regarding the "Maharatnas, Navratnas, and Miniratnas": 1. They are classifications of Public Sector Enterprises. 2. They were granted status to increase government interference in their functioning. 3. They were given greater managerial and operational autonomy. Which of the statements given above is/are correct?

NCERT Class 11 Economics — Chapter 3: Liberalisation, Privatisation and Globalisation: An Appraisal

mcqeasy

Consider the following statements regarding the "Maharatnas, Navratnas, and Miniratnas":

They are classifications of Public Sector Enterprises.
They were granted status to increase government interference in their functioning.
They were given greater managerial and operational autonomy.

Which of the statements given above is/are correct?

Official previous-year question

Verified 1 Aug 2026.

Options

A1, 2 and 3
B1 and 2 only
C2 only
D1 and 3 only

Did you get this right?

Solution

The correct option is 1 and 3 only.

Explanation

The Government of India classifies Central Public Sector Enterprises (CPSEs) into three categories-Maharatna, Navratna, and Miniratna-to empower them to compete in the global market and improve their efficiency.

Statement 1 is Correct: Maharatna, Navratna, and Miniratna are official classifications of Central Public Sector Enterprises (CPSEs). These statuses are granted by the Department of Public Enterprises based on specific criteria involving net profit, net worth, and turnover.

Statement 2 is Incorrect: The purpose of granting these statuses is not to increase government interference but to reduce it. The objective is to delegate enhanced powers to the Boards of these enterprises, allowing them to function more efficiently and effectively without needing government approval for every decision.

Statement 3 is Correct: These classifications provide greater managerial and operational autonomy to the CPSEs.

Financial Autonomy: The Boards of these companies are delegated powers to incur capital expenditure, enter into joint ventures, and make equity investments up to specific limits without government approval.
Operational Autonomy: They have freedom in areas such as human resource management and organizational restructuring to respond quickly to market dynamics.

Key Takeaway: The Maharatna, Navratna, and Miniratna schemes are designed to professionalize the management of CPSEs by granting them financial and administrative autonomy, thereby reducing government control over their day-to-day operations.

Your note

More from Chapter 3: Liberalisation, Privatisation and Globalisation: An Appraisal

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With reference to the 'Outsourcing' phenomenon under globalisation, consider the following statements: 1. It involves a company hiring regular services from external sources which were previously provided internally. 2. The growth of outsourcing is primarily driven by the stagnation of the manufacturing sector in developed countries. 3. India has become a destination for outsourcing due to low wage rates and the availability of skilled manpower. Which of the statements given above is/are correct?

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The correct option is 1 and 3 only.

Explanation

Statement 3 is Correct: These classifications provide greater managerial and operational autonomy to the CPSEs.

Financial Autonomy: The Boards of these companies are delegated powers to incur capital expenditure, enter into joint ventures, and make equity investments up to specific limits without government approval.
Operational Autonomy: They have freedom in areas such as human resource management and organizational restructuring to respond quickly to market dynamics.