Central Public Sector Enterprises (CPSEs) are government-owned companies in India, defined as entities where the Central Government holds a majority stake of 51% or more in the share capital. They are primarily incorporated under the Companies Act, 2013, or previous company law, or formed through an Act of Parliament.
The concept's origin lies in the post-independence drive for economic self-reliance, formalized by the Industrial Policy Resolution of 1956 during the Second Five-Year Plan. CPSEs were created to establish basic and heavy industries, drive economic growth, and ensure the development of strategic sectors like energy and transportation.
The functioning of CPSEs is overseen by the Department of Public Enterprises (DPE) under the Ministry of Finance, which acts as the nodal department for policy formulation. A key mechanism for granting operational and financial autonomy is the classification system: Miniratna and Navratna status were introduced in 1997, and the highest tier, Maharatna status, was introduced in 2010. For instance, a Maharatna CPSE, which must have an average annual net profit after tax of more than ₹5,000 crore during the last three years, is empowered to make equity investments up to ₹5,000 crore or 15% of its net worth in a single project without seeking government approval.
CPSEs connect to the Department of Investment and Public Asset Management (DIPAM), which manages the government's investments and disinvestment processes; the department was renamed in 2016 from the Department of Disinvestment. The annual Public Enterprises Survey, brought out by the DPE, provides a comprehensive performance review of the CPSE universe. While the classification system has evolved, the core principle of state ownership remains, though recent legislative efforts, such as the proposed Central Public Sector Enterprises (Protection of Interests of States) Bill, 2022, have focused on safeguarding state interests during disinvestment.