54 New CPSEs Created Since FY19

The landscape of Central Public Sector Enterprises (CPSEs) in India has experienced significant changes in recent years.

According to official data, the number of CPSEs increased sharply from 348 in 2018-19 to 402 in 2022-23.

This growth contradicts the trend of reducing the number of state-owned companies, driven by various strategic initiatives and sectoral priorities set by the government.

Surge in CPSEs: From 348 to 402

The rise in the number of CPSEs is mainly attributed to stronger enterprises in sectors like petroleum, power, and defense establishing new subsidiaries.

These subsidiaries were created as CPSEs ventured into government-prioritized areas such as renewable energy, Indigenous defense manufacturing, and electricity transmission.

Additionally, the lower corporate tax rate for new manufacturing units incentivized the establishment of new CPSE arms.

Marginal Increase in Operating CPSEs

Despite the overall increase in CPSE numbers, the count of operating CPSEs saw only a slight rise, from 249 in FY19 to 254 in FY23.

This marginal increase is due to the closure, liquidation, or non-operation of several unprofitable CPSEs.

The number of such non-operational companies rose from 13 in FY19 to 64 in FY23, highlighting a trend toward shutting down unviable businesses.

Decline in Centre-Owned CPSEs

Interestingly, the number of CPSEs directly owned by the central government decreased from 146 in FY19 to 142 in FY23.

This reduction resulted from the privatization of entities like Air India and the acquisition of others, such as Hospital Services Consultancy Corporation, by other CPSEs.

This shift reflects the government’s strategy to streamline and consolidate its holdings in state-owned enterprises.

The 2021 PSE Policy

In 2021, the central government introduced a Public Sector Enterprises (PSE) policy aimed at maintaining a minimal presence in four key sectors:

  1. Atomic energy, space, and defense
  2. Transport and telecommunications
  3. Power, petroleum, coal, and other minerals
  4. Banking, insurance, and financial services

The policy aims to privatize, merge, or close CPSEs in other sectors, empowering their boards to right-size and manage these enterprises autonomously.

This move allows the Department of Investment and Public Asset Management to concentrate on strategic sales of CPSEs.

Investment Autonomy for CPSEs

The government has granted investment autonomy to CPSEs based on their status, enabling them to create subsidiaries and joint ventures.

Maharatna CPSEs, for example, can invest up to Rs 5,000 crore in such ventures. Subsidiaries where any CPSE holds more than 50% equity are also categorized as CPSEs, further expanding the scope and influence of state-run enterprises.

Green Subsidiaries on the Rise

In recent years, several major green subsidiaries have been established by CPSEs, reflecting a focus on renewable energy. Notable examples include:

  • NTPC Green Energy
  • SJVN Green Energy
  • NHPC Renewable Energy
  • NLC India Green Energy
  • CIL Navikarniya Urja
  • ONGC Green

These subsidiaries highlight the commitment of CPSEs to align with the government’s renewable energy initiatives and contribute to sustainable development.

Financial Performance: A Mixed Bag

The financial performance of CPSEs has been mixed in recent years. In FY23, the aggregate net profit of CPSEs saw a 15% decline to Rs 2.12 trillion, primarily due to significant profit dips in oil marketing and steel companies caused by commodity price volatility following the Ukraine-Russia war.

This is in stark contrast to the previous year, when CPSEs reported a remarkable 51% annual growth in aggregate net profit, reaching Rs 2.49 trillion in FY22. In FY19, the overall net profit of operating CPSEs stood at Rs 1.43 trillion.


The increase in the number of CPSEs from 348 in FY19 to 402 in FY23, despite the overarching trend towards downsizing, underscores the dynamic nature of India’s public sector landscape.

Strategic initiatives, sectoral priorities, and government policies have driven the creation of new subsidiaries and ventures, particularly in renewable energy and other prioritized areas.

While the number of operating CPSEs has only marginally increased, the reduction in directly Centre-owned enterprises reflects a move towards consolidation and privatization.

As CPSEs navigate the challenges and opportunities of a changing economic environment, their evolving role in India’s development remains significant.

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