BUDGETING FOR INDIA'S PUBLIC SECTOR GIANTS

In a striking reversal of trend during the last decade, central public sector undertakings have emerged as an engine of profitability and growth for the exchequer.

- RAM SINGH

They have posted record-breaking earnings for common shareholders and generated substantial dividends and royalties for the government, while preserving their reputation as a source of stable and remunerative employment for millions of Indians.At the same time, their potential in handholding state PSUs and skilling Indian youth remains untapped. Also, they are now up against serious challenges posed by new technologies like artificial intelligence, as well as the green transition necessitated by UN's Sustainable Development Goals and EU's carbon tax on exports. Budget 2026 can help harness the real potential of these recently-awakened giants and prepare them for the new challenges.

CPSU earnings have quadrupled over the last decade. In 2024-25, their total net profits exceeded ₹5 lakh crore. The combined net income of oil companies such as Indian Oil, ONGC, BPCL and HPCL stood at ₹1.03 lakh crore, even as a fall in oil prices dented the profits of upstream and downstream firms. As of December 31, 2025, petroleum accounted for 8.4 percent of India's gross exports.

Non-oil CPSUs also registered robust profitability in 2024-25, with a net income of ₹3.95 lakh crore. Meanwhile, PSU banks posted record profits of ₹1.78 lakh crore. SBI's profits alone crossed ₹79,000 crore. Exports of the defence CPSUs reached a record high of ₹23,622 crore in the year. Indeed, the efficiency gains are broad-based, spanning the banking, defence and infrastructure sectors.