The latest news from India’s commercial sector reveals that the Government has granted ‘Maharatna’ status to Power Finance Corporation (PFC), a state-owned entity. As per the order issued by the Department of Public Enterprises (under the Ministry of Finance), PFC has become the 11th public sector enterprise in the country to acquire this prestigious status. It now aligns with other leaders in the sphere like ONGC, Indian Oil Corporation, Steel Authority of India Limited (SAIL), and BHEL.
About Maharatna Status
Introduced in 2010 by the Union government, the ‘Maharatna’ dispensation was devised as a crown for mega Central Public Sector Enterprises (CPSEs) with the aspiration of turning them into global powerhouses. CPSEs are the companies in which either the Central Government or other CPSEs have a direct holding of 51% or more.
To be considered for the esteemed ‘Maharatna’ status, the company should have recorded over Rs. 5,000 crore of net profit for three sequential years. The alternate criteria could be an average annual turnover of Rs. 25,000 crore or an average annual net worth of Rs. 15,000 crore over the past three years. Global operations or footprints are also vital components for consideration. Besides, the CPSE should already possess a Navratna status and must be listed on an Indian stock exchange.
Insights on Power Finance Corporation (PFC)
Established in 1986, PFC is the most extensive infrastructure finance company committed to the power sector, operating under the administrative command of the Ministry of Power.
Significance of the Recognition
The procurement of the Maharatna status will pave the way for PFC to execute greater financial and operational efficiency. With this distinction, PFC can now invest up to Rs. 5,000 crore or 15% of its net worth in a single project. This is a significant leap from Navratna and Miniratna CPSEs that can invest up to Rs. 1,000 crore and Rs. 500 crore respectively. In addition to this, the government has granted PFC increased powers to undertake mergers and acquisitions. The PFC Board also stands to gain the capability to structure and implement schemes related to personnel and human resource management and training.
Implications of the Status
One of the primary benefits of acquiring Maharatna status is that it will enable PFC to offer competitive financing for the power sector. This will be instrumental in achieving the goal of providing affordable and reliable ‘Power For All 24×7.’
More importantly, the enhanced powers accompanying the Maharatna Status will bolster PFC’s capacity to push the government’s agendas effectively. These include funding under the National Infrastructure Pipeline, realizing the national commitment towards achieving 40% green energy by 2030, and efficiently monitoring and implementing the newly revamped distribution sector scheme with an outlay of over Rs. 3-lakh crore.
This information is sourced from PIB.