Consider the following statements regarding the 'Navratna' policy: 1. The identified PSEs were stripped of their managerial autonomy. 2. It was introduced to improve efficiency and infuse professionalism in Public Sector Enterprises (PSEs). 3. The government decided to fully privatise all Navratna companies by 2010. Which of the statements given above is/are correct?

The correct option is 2 only Explanation The 'Navratna' scheme was introduced by the Government of India in 1997. Its purpose was to identify Central Public Sector Enterprises (CPSEs) that possessed comparative advantages and to support them in their drive to become global giants. Statement-wise Analysis - Statement 1 is Incorrect: The core objective of the Navratna policy was to improve efficiency, infuse professionalism, and enhance the competitiveness of select PSEs in the global market. - Statement 2 is Correct: The policy was designed to grant enhanced managerial and financial autonomy to these enterprises, not strip them of it. The Boards of Navratna PSEs were delegated powers to incur capital expenditure, enter into joint ventures, and effect organizational restructuring without seeking government approval for every decision. - Statement 3 is Incorrect: The Navratna policy focused on strengthening public sector units through autonomy and performance improvement. There was no policy decision to fully privatise all Navratna companies by 2010. While disinvestment is a separate parallel policy, the Navratna status itself implies continued state ownership with operational freedom. Key Takeaway Navratna status is a classification for CPSEs that grants significant financial and operational autonomy, enabling them to invest capital and manage resources independently to compete effectively on a global scale.

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

mcqmedium

Consider the following statements regarding the 'Navratna' policy:

The identified PSEs were stripped of their managerial autonomy.
It was introduced to improve efficiency and infuse professionalism in Public Sector Enterprises (PSEs).
The government decided to fully privatise all Navratna companies by 2010.

Which of the statements given above is/are correct?

Official previous-year question

Verified 1 Aug 2026.

Options

A1, 2 and 3
B1 only
C1 and 3 only
D2 only

Did you get this right?

Solution

The correct option is

2 only

Explanation

The 'Navratna' scheme was introduced by the Government of India in 1997. Its purpose was to identify Central Public Sector Enterprises (CPSEs) that possessed comparative advantages and to support them in their drive to become global giants.

Statement-wise Analysis

Statement 1 is Incorrect: The core objective of the Navratna policy was to improve efficiency, infuse professionalism, and enhance the competitiveness of select PSEs in the global market.
Statement 2 is Correct: The policy was designed to grant enhanced managerial and financial autonomy to these enterprises, not strip them of it. The Boards of Navratna PSEs were delegated powers to incur capital expenditure, enter into joint ventures, and effect organizational restructuring without seeking government approval for every decision.
Statement 3 is Incorrect: The Navratna policy focused on strengthening public sector units through autonomy and performance improvement. There was no policy decision to fully privatise all Navratna companies by 2010. While disinvestment is a separate parallel policy, the Navratna status itself implies continued state ownership with operational freedom.

Key Takeaway

Navratna status is a classification for CPSEs that grants significant financial and operational autonomy, enabling them to invest capital and manage resources independently to compete effectively on a global scale.

Your note

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

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Consider the following statements regarding the deregulation of the industrial sector under the 1991 reforms: 1. Industrial licensing was abolished for all product categories without exception. 2. Industries reserved for the public sector were reduced to only a part of atomic energy generation and some core activities in railway transport. 3. The market was allowed to determine prices in most industries. Which of the statements given above is/are correct?

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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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With reference to the trade policy reforms initiated in 1991, consider the following statements: 1. Quantitative restrictions on imports of manufactured consumer goods were fully removed immediately in 1991. 2. Export duties were removed to increase the competitive position of Indian goods in international markets. 3. Import licensing was abolished except for hazardous and environmentally sensitive industries. Which of the statements given above is/are correct?

hard

Consider the following statements regarding the performance of the agriculture sector during the reform period: 1. Public investment in the agriculture sector has declined in the reform period. 2. The removal of fertiliser subsidy has decreased the cost of production for farmers. 3. There has been a shift from export market production to domestic market production. Which of the statements given above is/are correct?

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The correct option is

2 only

Explanation

Statement-wise Analysis

Statement 1 is Incorrect: The core objective of the Navratna policy was to improve efficiency, infuse professionalism, and enhance the competitiveness of select PSEs in the global market.
Statement 2 is Correct: The policy was designed to grant enhanced managerial and financial autonomy to these enterprises, not strip them of it. The Boards of Navratna PSEs were delegated powers to incur capital expenditure, enter into joint ventures, and effect organizational restructuring without seeking government approval for every decision.
Statement 3 is Incorrect: The Navratna policy focused on strengthening public sector units through autonomy and performance improvement. There was no policy decision to fully privatise all Navratna companies by 2010. While disinvestment is a separate parallel policy, the Navratna status itself implies continued state ownership with operational freedom.