More than 40% state-owned enterprises are loss-making: 16th Finance Commission report

The report states that as on March 31, 2023, there were 1,635 SPSEs in India. Government Companies (GCs) where the state government’s stake in paid-up capital is 51 per cent or more account for the largest proportion of SPSEs. Of the total number, 1,414 SPSEs (86.5 per cent) are GCs. There are 135 Government Controlled Other Companies (GCOCs) and 86 Statutory Corporations SCs among the SPSEs.

Commenting on the national picture, the report stated, “Profits are a crucial indicator of an enterprise’s financial sustainability. As per the latest available data, nearly 50 per cent of SPSEs (541 out of 1,107 SPSEs for which data on profit / loss is available) across all states are either in loss or zero net profit. This statistic highlights the highly fragile financial condition of SPSEs.”

It added, “One of the major issues concerning SPSEs is the large number of non-operational or inactive enterprises. While there are some differences in how SPSEs are classified as ‘inactive’ in audit reports of various states, by and large, inactive SPSEs can be described as those that have ceased to carry out their operations.”