Parliament sharpens PSU oversight as India opens up strategic sectors

The increased parliamentary oversight at a time of policy and operational shifts in India’s state-run firms is significant, given that their sales matched around 11.2% of the country’ nominal GDP in FY25, with annual turnover of ₹37 trillion. Also, only 66 of the 291 operational central PSUs were listed on India's stock exchanges.

The listed companies had a market capitalization of ₹38.57 trillion as of 31 March 2025, according to the department of public sector enterprises.

Panda said that the 22-member parliamentary panel plans to review close to two dozen public sector enterprises by the end of its current term, compared to four in the last year of the previous Lok Sabha. COPU, comprising 15 Lok Sabha members and seven Rajya Sabha members, is reconstituted every year.

The current 18th Lok Sabha has a five-year tenure that began in June 2024.

Panda said that the committee, in its first year—August 2024 to April 2025—under his chairmanship in the current Lok Sabha delivered 12 reports, a three-fold increase from the reports presented in the panel's last year in the previous Lok Sabha. In its current term that started May 2025, the committee has already tabled 11 reports in Parliament. Panda added that the total number of reports to be presented in the current term would be about twice this. “It will be a 600% improvement compared to the number of reports in the last year of the last Lok Sabha," Panda said.

“We have focused on reviewing sectors which have never been reviewed or not been reviewed for many decades. Typically, only very large profitable companies were being reviewed, like the petroleum companies, but smaller strategic companies are equally important. So, for example, the Nuclear Power Corporation of India (NPCIL) had never been reviewed. We reviewed it. Indian Rare Earths Ltd had never been reviewed. We reviewed it because these are strategic. We have seen the recent trade wars and how China is throttling supply of rare earths, causing challenges to the US and many economies, and we also have challenges. So we reviewed it," said Panda.

The chairperson said that the government has taken a very bold step with the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (Shanti) Bill, which is now a law. “Now the private sector will be allowed into the civil nuclear energy sector," Panda said, explaining why the panel reviewed NPCIL.

The committee examines the physical and financial performance, safety compliance and research initiatives of the state-run companies, takes evidence and views from company executives and the line ministries, and make recommendations to the government. The panel’s recommendations influence policy-making and operation of these companies.

India plans to have 100,000 megawatts (MW) of nuclear power, up from about 8,700MW, less than 2% of India’s installed power generation capacity. “100,000MWs mean the private sector will come in, and maybe it can contribute half of that. But our existing nuclear power generation has to go up to 50,000MWs at least," said Panda.

Uranium Corporation of India under the Department of Atomic Energy (DAE) has a role to play, he added.

Experts suggested that enhanced oversight of more and more public sector enterprises would lead to better compliance.

"There is a need for strict mechanism to avoid any non-compliance by listed public sector enterprises to SEBI Listing Obligations and Disclosure Requirements (LODR)," said Shriram Subramanian, managing director (MD) and founder of InGovern Research Services, a corporate governance advisory firm.

“Several public sector enterprises have been lagging in terms of compliances. There are many instances where even basic LODR compliances like the requisite number of independent directors, woman directors on boards, vacant CMD/MD posts, etc are not met. These have been highlighted even by past chairpersons of Sebi (Securities and Exchange Board of India). There is adequate time for the government and the Public Enterprises Selection Board to finalize the candidate, but, in several instances, posts remain vacant for independent directors, and CMDs have been given extension," said Subramanian, highlighting the need for heightened parliamentary oversight.

“Government-backed companies need to set an example for private players in terms of regulatory compliances," he added.

Panda said that in the past decades, there have been instances of public sector companies performing poorly, but some of them are doing extremely well now.

“Container Corporation of India earlier was a monopoly. Now there is a lot of competition in logistics from the private sector. Despite that, Container Corporation of India is growing and is doing better. That's a very good sign because the whole pie--Indian economy--is growing. The original monopoly player is also able to adapt and grow, amid new competition."

The committee was impressed to see that Food Corporation (FCI) of India is using modern technology like drones and AI for inventory management, said Panda, adding that FCI is handling more tonnage with less manpower, showing greater efficiency.

“The Indian public sector in many areas is actually doing very well. We are running the world's largest food aid program. The Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) is the world's largest food aid program with 800 million beneficiaries. FCI plays a very big role in the procurement and management of this," said Panda, adding that improved efficiency of state-run companies is a good sign for the Indian economy.

Apart from the direct contribution to the country’s economic output, state-owned enterprises also help in creating a significant downstream impact in the form of growth opportunities for small businesses and direct and indirect employment. State-owned enterprises also add to the exchequer by way of dividends and taxes.

The contribution to central exchequer of all CPSEs remains an important source of development financing for the government. In FY25, it stood at ₹4.94 trillion, as per official data.

A total of 226 public sector undertakings out of the operating 291 PSUs recorded a cumulative profit of ₹3.08 trillion in FY25, according the annual report for CPSEs published by the department of public enterprises (DPE).

The aggregate loss of 63 loss-making CPSEs was ₹18,054 crore in FY25 as against ₹20,935 crore in FY24. Food Corporation of India (FCI) has reported no profit or loss.

Gross revenue of operating CPSEs increased 2.6% from ₹36.08 trillion in FY24 to ₹37.01 trillion in FY25.

Financial investments in these CPSEs account for a significant part of India's capital expenditure. During the five year period of FY21-25, these investments rose from ₹21.28 trillion to ₹31.65 trillion.