Do you think the navaratna policy of the government helps in improving the performance of public sector undertakings in India? How?
Yes, the Navratna policy of the government significantly helps in improving the performance of public sector undertakings in India.
The government identifies PSEs and declares them as maharatnas, navratnas and miniratnas to improve efficiency, infuse professionalism and enable them to compete more effectively in the liberalised global environment.
These enterprises are granted greater managerial and operational autonomy in taking various decisions to run the company efficiently. This allows them to respond quickly to market conditions without excessive bureaucratic interference.
Greater operational, financial and managerial autonomy has been granted to profit-making enterprises. This helps them increase their profits and improve financial discipline while facilitating modernisation of these enterprises.
The policy enables these PSEs to compete effectively in the global market. Many of these profitable PSEs were originally set up to provide infrastructure and direct employment to the public, and the Navratna status helps them continue this mandate while becoming more efficient and competitive.
Explanation
This question is from Chapter 3 on Liberalisation, Privatisation and Globalisation. The textbook explains in Box 3.1 that the Navratna policy was introduced to improve the performance of PSEs by granting them autonomy. The key points students should mention are: (1) the purpose of the policy - improving efficiency, infusing professionalism and enabling global competition, (2) the mechanism - granting greater managerial, operational and financial autonomy, and (3) the outcome - increased profits and efficient running of companies. The context also mentions that miniratnas are profit-making enterprises that receive similar benefits.