Centre’s revenue focus has shifted from selling PSUs to earning more from them, data shows
Data analysis shows that despite introducing a renewed ‘investment policy’ in 2020, the central government’s focus has shifted from selling off its assets to a determination to extract maximum value. The recent launch of National Monetization Pipeline 2.0 marks an extension of this policy change.
The Center had launched the Public Sector Enterprises Policy in 2021, in which it said it would exit all non-strategic sectors and maintain minimum presence in strategic sectors. An analysis by Hindu But data obtained with the Department of Investment and Public Asset Management shows that income from investment has fallen every year, except for a brief increase in 2022-23.
On the other hand, dividend income from public companies increased steadily every year. In addition, some other policy decisions, such as the removal of a separate heading for disinvestment in the Budget documents and the advancement of the National Assets Monetization Pipeline, indicate that the focus is shifting to better utilization of existing assets.
Initial excitement about customization
In 2021, Prime Minister Narendra Modi had categorically claimed that the government had “no business to do”.
“When a government does business, it creates losses,” Mr. Modi said in a 2021 webinar organized by DIPAM. “The government is rule-bound and lacks the courage to make bold business decisions. It is the government’s duty to support businesses and businesses. But it is not required to own and operate businesses.”
More recently, in August 2025, Minister of State for Finance Pankaj Chaudhary informed the Lok Sabha that the strategic disinvestment or privatization policy is based on the economic principle that the Government “should minimize its presence in sectors” where the private sector has come of age and the economic potential of public sector companies can be better exploited in the hands of a strategic investor.
In 2022-23, the Central Government sold part of its stake in various PSEs such as Oil and Natural Gas Corporation, Life Insurance Corporation, GAIL India and Indian Railway Catering and Tourism Corporation. This saw earnings from disinvestment rise to 35.294 billion rupees in 2022-23, ending a four-year streak of declines.
Not enough buyers
After this, the government found it increasingly difficult to generate revenue by reducing investments. According to officials working in the Ministry of Finance at the time, the problem was that the private sector was not willing to acquire public sector companies due to their large number of employees and loss-making assets.
In fact, in the revised estimates for 2023-24, the Center has removed the separate head of disinvestment in the budget documents, instead combining them with several other capital receipts under the heading ‘Miscellaneous Capital Receipts’. However, the government no longer sets targets for disinvestment proceeds in any given year.
According to data compiled by the DIPAM nodal department, income from investments fell to 16,507.3 billion rupees in 2023-24 and 10,163.02 billion rupees in 2024-25. The government has earned Rs 15,562.8 billion from investments so far in 2025-26, with one more month left for the financial year to end.
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We’re pushing for more dividends
On the other hand, the Center continues its policy of maximizing the dividends it can receive from its companies. In November 2020, DIPAM issued an advisory to CEOs and Managing Directors of all central PSEs regarding a “consistent dividend policy”.
“CPSEs are advised to try to pay higher dividends taking into account relevant factors such as profitability, capex requirements and leveraging cash/reserves and net worth,” he said.
This was reinforced by the publication in November 2024 of the Revised Guidelines on Capital Restructuring of Central Public Sector Enterprises, which DIPAM said “The Government aims to emphasize value creation in CPSEs to maximize returns for the Government and other stakeholders.”
The government’s dividend income, excluding those received from public sector banks and the Reserve Bank of India, increased from Rs 39,750 billion in 2020-21 to Rs 74,128.6 billion by 2024-25. This amount so far stands at Rs 59,730.6 billion in 2025-26.
Jumping rope in the private sector
In 2021, the government also launched the National Monetization Pipeline (NMP), under which the government will lease our various brownfield assets to the private sector without changing ownership hands, with an earnings target of Rs 6 lakh crore from 2021-22 to 2024-25. According to the government, 90 percent of this target has been achieved.
Finance Minister Nirmala Sitharaman launched NMP 2.0 on February 23 with an aim to earn around Rs 16.72 lakh crore over the five-year period from 2025-26 to 2029-30 through this route.
It was published – 28 February 2026 17:34 IST
