Read the following statements - Assertion (A) and Reason (R)carefully and choose the correct alternative given below:
Assertion (A) : The government in India identifies some of the Public Sector Enterprises as Maharatnas, Navratnas and Miniratnas
Reason (R ): Such a classification was done primarily to protect these enterprises from the onslaught of the MNCs in the post liberalization era.
Answer & explanation
Correct answer: option 3
The correct answer is Option 3: Assertion (A) is true but Reasoning (R) is not correct.
Assertion (A) : The government in India identifies some of the Public Sector Enterprises as Maharatnas, Navratnas and Miniratnas. This is correct.
Reason (R ): Such a classification was done to protect these enterprises from the onslaught of the MNCs in the post liberalization era.This is incorrect. The main purpose of such classification is to improve efficiency and performance by setting benchmarks and encouraging competition among PSEs, not to protect them from MNCs.
The main purpose of classifying PSEs into different categories was to:
a. Grant greater autonomy and flexibility to Maharatnas and Navratnas in decision-making and business operations.
b. Improve efficiency and performance by setting benchmarks and encouraging competition among PSEs.
c. Facilitate faster growth and expansion for these enterprises.
"In order to improve efficiency, infuse professionalism and enable PSU to compete more effectively in the liberalised global environment, the government identifies PSEs and declare them as maharatnas, navratnas and miniratnas. They were given greater managerial and operational autonomy, in taking various decisions to run the company efficiently and thus increase their profits. Greater operational, financial and managerial autonomy has also been granted to profit-making enterprises referred to as miniratnas."