Lok Sabha Question No. 371 (STARRED), answered on 2025-03-26
Subject: Navratna Status to IRCTC and IRFC
Ministry: RAILWAYS
Asked by: Shri Vijayakumar Alias Vijay Vasanth

## GOVERNMENT OF INDIA

## MINISTRY OF RAILWAYS

## LOK  SABHA STARRED QUESTION NO.371 TO BE ANSWERED ON 26.03.2025

## NAVRATNA STATUS TO IRCTC AND IRFC

- *371.  SHRI VIJAYAKUMAR ALIAS VIJAY VASANTH:

Will the Minister of RAILWAYS be pleased to state:

- (a) the details of the breakup of the financial performance of Indian Railways Catering and Tourism Corporation (IRCTC) and Indian Railway Finance Corporation (IRFC) that led to their elevation to Navratna status and whether this is expected to increase transparency and accountability in their operations;
- (b) the manner in which grant of Navratna status to IRCTC and IRFC impacts the  job  security,  wages  and  working  conditions  of  employees  in  these organizations;
- (c)  whether  the  Government  proposes  to  take  any  measures  to  ensure  that their  rights  and  welfare  are  safeguarded  amid  the  increased  operational autonomy, if so, the details thereof and if not, the reasons therefor;
- (d)  whether  any  specific  powers  and  operational  autonomy  are  granted  to IRCTC and IRFC following their Navratna status;
- (e)  the details of the measures to ensure that these powers are not misused for private interests or lead to reduced accountability  to the public; and
- (f)  whether  the  Government  proposes  to  address  concerns  regarding  the disparity in the financial growth between these public sector companies and other  sectors  of  the  Railways,  which  still  face  significant  funding  issues considering  the  fact  that  IRCTC  and  IRFC  have  demonstrated  impressive financial performance?

MINISTER OF RAILWAYS, INFORMATION & BROADCASTING AND

## ANSWER ELECTRONICS & INFORMATION TECHNOLOGY

(SHRI ASHWINI VAISHNAW)

(a) to (f):  A Statement is laid on the Table of the House.

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STATEMENT  REFERRED  TO  IN  REPLY  TO  PARTS  (a)  to  (f)  OF  LOK  SABHA STARRED QUESTION NO. 371 TO BE ANSWERED ON 26.03.2025.

(a) to (f):  The Navratna status to Central Public Sector Enterprises (CPSEs) is granted  after  review  of  financial  performance  parameters  as  per  extant guidelines of Department of Public Enterprises (DPE), Ministry of Finance.

Such financial performance parameters include Net Profit to Net worth, Manpower Cost to total Cost of Production or Cost of Services, Profit before Depreciation,  Interest  and  Taxes  (PBDIT)  to  Capital  employed,  Profit  before Interest  and  Taxes  (PBIT)  to  Turnover,  Earning  per  share  and  Inter-Sectoral performance (Net profit to Net Worth) for the last three years.

IRCTC's  and  IRFC's  Revenue  from  Operations  grew  at  Compounded Annual Growth Rate (CAGR) of  more than 17% and  14%, respectively,  while Net-worth,    Earning  Before  Interest,  Depreciation  and  Taxes  (EBIDTA)  and Profit  after  tax,  during  last  5  years  grew  with  CAGR  of  more  than  20%  and 10%, respectively.

Being listed CPSEs, IRCTC and IRFC are governed through various rules, regulations  and  guidelines,  in  particular,  Companies  Act  2013,  SEBI  (Listing Obligations  and  Disclosure  Requirements)  Regulations  and  guidelines  issued by DPE.

The  companies  maintain  highest  standards  of  governance  abiding  with basic principles of Corporate Governance by means of strong internal controls, Code of Conduct and Schedule of Powers (SoP).

The Company has diverse Board and well structured committees of Board for  effective  decision  making.  The  Board  and  the  respective  committees regularly monitor the Action Taken Report on its decisions.

The Companies are also subject to audit by C&AG of India and statutory auditor appointed by C&AG of India.

The Navratna status for IRCTC and IRFC will enhance market perception, stakeholder's confidence and most importantly, employee's morale and motivation.    The  employees  can  be  better  incentivized  through  allowances, increments, introduction of staff welfare scheme as per extant guidelines. It will facilitate retention of employees and attract skilled talented manpower.

DPE  in  its  guidelines  has  provided  enhanced  autonomy  and  powers  to Board  of  Directors  (BoD)  of  the  Navratna  CPSEs,  the  few  of  which  are summarized below:-

- (i)  The  ceiling  on  equity  investment  to  establish  financial  joint  ventures  and wholly owned subsidiaries in India or abroad shall be 15% of the net-worth of the CPSE in one project limited to Rs.1000 crore in India and the overall ceiling on such investments in all projects put together shall be 30% of the net-worth of the CPSE.
- (ii) Powers for mergers and acquisitions subject to certain conditions.
- (iii)  Incur  capital  expenditure  on  purchase  of  new  items  or  for  replacement, without any monetary ceiling.
- (iv)  Enter into technology joint ventures or strategic alliance,
- (v)  Creation  of  posts;  organizational  restructuring  including  establishment  of profit centers,
- (vi)  Structure & implement schemes relating personnel and Human Resource Management, training, etc.
- (vii)  Raise  debt  from  domestic  capital  markets  and  for  borrowings  as  per guidelines. To ensure accountability, the exercise of these powers is subject to conditions and guidelines stipulated by DPE as mentioned below(i) The  proposals must be  presented to the BoD  in  writing  with analysis  of relevant factors and quantification of anticipated results and benefits. (ii) The Government Directors, Financial Directors and concerned Functional Directors  must  be  present  when  major  decisions  are  taken,  especially when the proposal pertains to investments, expenditure or organizational / capital restructuring. (iii) Decisions on such proposals should preferably be unanimous. In the event of  any  decision  on  important  matter  not  being  unanimous,  a  majority decision may be taken by at least two-thirds of the Directors. (iv) No financial support or contingent liability on part of the Government. (v) Establish transparent and effective systems of internal monitoring, including  the  establishment  of  an  audit  committee  of  the  Board  with membership of non-official Directors.

Since 2014, the Gross Budgetary Support to Railway by the Government of India has increased significantly from Rs 29,055 Cr in 2013-14 to Rs 2,52,200 Cr in 2025-26, i.e., more than 8.6 times. This has resulted in development of infrastructure in Indian Railways in a big way.

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