Maharatna Status to Power Finance Corporation (October 2021)

The government of India recently has accorded the Maharatna status to state-owned Power Finance Corporation (PFC) . The Department of Public Enterprises, under the Ministry of Finance issued an order to this effect. PFC also has become the 11th public sector enterprise to get the Maharatna status in India. With this PFC has joined the ranks of other companies like ONGC, Indian Oil Corporation, SAIL and BHEL among others.

Maharatna status can only be granted to a company which has shown more than ₹ 5,000 crore of net profit for three consecutive years, should have an annual net worth of ₹ 15,000 or an avg. annual turnover of ₹ 25,000 crore for three years.

Infrastructure Vision 2025

About

  • Those companies in which the direct holding of the Central Govt. or other CPSEs is 51% or more are known as the CPSEs.
  • CPSE or Central Public Sector Enterprises (CPSEs) should be listed on an Indian stock exchange having a Navratna status.
  • Criteria has been laid down by the govt. of India for granting the status of:
    • Maharatna
    • Navratna
    • Miniratna
  • While Navratna CPSEs can invest up to ₹ 1,000 crore the Miniratna CPSEs can invest ₹ 500 crore.

PFC

  • Ministry of Power.
  • Power Finance Corporation was incorporated in 1986.
  • It is also the largest infrastructure finance company dedicated to the power sector.
  • In a single project, PFC could invest up to ₹ 5,000 crore or 15% of its net worth.
  • The govt. of India has also granted enhanced powers for undertaking various mergers and acquisitions.
  • The PFC Board further could structure and implement schemes related to:
    • Personnel
    • Human Resource Management
    • Training

Way Ahead

  • PFC should be enabled to offer competitive financing for the power sector.
  • To make available affordable & reliable Power For All 24×7 .
  • The PFC with the enhanced powers coming up with Maharatna Status would help it in pushing the government՚s agenda of funding under the:
    • National Infrastructure Pipeline
    • National Commitment of 40% green energy by 2030
    • Effective monitoring and implementation of the new revamped distribution sector scheme.

National Infrastructure Pipeline

  • To enable a forward outlook on infrastructure projects.
  • Job creation, improvement in the ease of living, equitable access infrastructure for all, thereby making a more inclusive growth.
  • It includes economic and social infrastructure projects.
  • Around 70% of the projected capital expenditure in terms of infrastructure in India during the fiscals 2020 to 2025:
    • Energy (24%)
    • Roads (19%)
    • Urban (16%)
    • Railways (13%)

Examrace Team at May 27, 2022