Central Public Sector Enterprises in India: A Case of Policy and Perception Conundrum

Abstract

The fact that there is a direct relationship between higher investment and higher economic growth is accepted by all. Central Public Sector Enterprises (CPSEs), in this respect, have been vehicles of large-scale investment in the country. A good many of these enterprises are listed on the stock exchanges. Their market capitalisation, however, recorded a significant fall in recent months despite these companies showing good performance on their ‘profit and loss’ accounts. The recent government pronouncements regarding CPSEs are observed to have adversely impacted the market sentiments and consequently their market capitalisation. The article argues that a White Paper on implementation of pending reforms as recommended by the Panel of Experts on Reforms in CPSEs, set up by the Planning Commission earlier, would go a long way in reversing the current trend of fall in market capitalisation of these enterprises.