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This paper aims to attempt to empirically investigate the impact of privatization on the performance of central public sector enterprises in India. Further attempt is made to explore whether privatization is a necessary or sufficient condition for improvement of performance of central public sector enterprises.

The scope of the study is limited to financial and operating performance analysis of 206 central public sector enterprises in India. Multiple regression analysis has been used to determine the magnitude and direction of relationship between dependent and independent variables and identify variables other than privatization which affects performance.

The study found that financial and operational performance of firms has improved significantly due to privatization. Further, firm-specific factors and other parallel reforms adopted by enterprises have significantly influenced their performance. The established regression model is highly significant with F-ratio of 31.825 at 99% significance level. The degree of explanation of the model is robust with adjusted R² at 0.956 implying that only 4.40% of explanation in the dependent variable cannot be explained by designated independent/explanatory variables.

The study would be useful to public policymakers to reach to a policy view on whether further disinvestment/privatization of central public sector enterprises need to be continued, and if so, then to what extent and direction.

The study of Bharat Heavy Electricals Limited (BHEL)11BHEL was founded in 1950s. It has emerged as the largest engineering and manufacturing enterprise of its kind in India. Power equipment major BHEL has approached the government for the grant of coveted Maharatna status, which will give the company greater financial autonomy. At present, BHEL is a Navratna company. A company qualifying for the Maharatna status should have an average annual turnover of more than Rs 20,000 crores in the last three years, according to the new guidelines. Once a company gets the Maharatna status, its board would not be required to take the government’s permission for investments up to Rs 5,000 crores in a joint venture project or wholly owned subsidiary. For the Navratna companies, the limit is Rs 1,000 crores. was undertaken to understand the quality of corporate governance in public sector and to gain insight into the major infirmities in internal and external conditions that impinge on the quality of corporate governance in the public enterprises. In India, to bring in more transparency and accountability in the functioning of Central Public Sector Enterprises (CPSEs), the government of India in June 2007 introduced the Guidelines on Corporate Governance. These Guidelines were originally of voluntary nature. The government has acknowledged the need for continuing the adoption of good Corporate Governance Guidelines for ensuring robust public sector with high level of transparency and decided to make these Guidelines mandatory and applicable to all CPSEs. Thereby, government in March 2010 asked all the 246 CPSEs to mandatorily follow corporate governance norms and business ethics, a step to ensure more transparency in their functioning.

Since 2013, the Indian Companies Act Section 135 has mandated corporate social responsibility (CSR) reporting by Indian central public sector enterprises (CPSEs). CSR reporting is regulated by multiple Government of India ministerial agencies, each requiring different formats and often different data. This study aims to understand the impact of these multiple regulatory bodies on CSR reporting by Indian CPSEs; evaluate the expectation gap between regulators and the regulated; and investigate the compliance burden on CPSEs.

An interview-based approach was adopted to evaluate the perspectives of both regulators and regulated CPSEs on the impact of the new regulations on CSR reporting quality. The authors use the lens of institutional theory to analyse the findings.

Driven by coercive institutional pressures, CPSEs are overburdened with myriad reporting requirements, which significantly negatively impact CPSEs’ financial and human resources and the quality of CSR activity and reports. It is difficult for CPSEs to assess the actual impact of their CSR activities due to overlapping with activities of the government/other institutions. The perceptions of regulators and the regulated are divergent: the regulators expect CPSEs to select more impactful CSR projects to comply with mandatory reporting requirements.

The findings of this study emphasise the need for meaningful dialogue between regulators and the regulated to reduce the expectation gap and establish a single regulatory authority that will ensure that the letter and spirit of the law are followed in practice and not just according to a tick-box approach.

While national public policies such as performance contracts and disinvestment affect the dynamics of large- and medium-scale state-owned enterprises in emerging market economies, the purpose of this paper is to analyze the performance of India’s public sector undertakings (PSUs) and suggest options to improve their outcomes.

Using firm-level data on India’s 235 PSUs with total assets of around $500 billion over the past two and half decades (1990-2015), the study empirically tests the effect of performance contracts, measured by memorandum of understanding (MOU) and disinvestment, measured by private equity share, on PSUs performance indicator such as return on capital (ROC). Data were collected from the Public Enterprises Survey Reports released by the Department of Public Enterprises under India’s Ministry of Heavy Industries and Public Enterprises, Department of Disinvestment, Bombay Stock Exchange and Capitaline database. By controlling firm-, industry- and macro-level factors in regression models, the results were presented in several aspects like service sector, non-service sector and individual and joint effects.

Empirical estimations indicate that performance contracts such as MOUs have had a positive impact on PSU performance by increasing their ROC by 8-9 percent. This result holds more strongly for the non-service sector (manufacturing, mining) but less so for service sector firms. In the case of service sector firms, partial privatization (share sales) has a significant impact on performance, making them ideal candidates for more aggressive disinvestment. Larger PSUs (Maharatnas) appear to perform better than smaller PSUs and even better than private firms of similar size. Smaller PSUs (Navratnas and Miniratnas) perform worse than private companies and should be good candidates for strategic disinvestment (privatization). PSUs that do not have Ratna status – and are loss makers – should be disposed of their asset value.

The study recommends that India should change the public sector balance sheet by raising capital through strategic disinvestment (privatization), disinvestment and liquidation of PSUs and re-investing it, in public infrastructure through the National Infrastructure Investment Fund and not into the budget as a revenue-raising measure. It should also transform Maharatnas into world class companies with greater commercialization.

The paper makes significant contributions to the academic literature on the changing dynamics of state-owned enterprises in emerging economies by examining the effect of performance contracts and disinvestment on India’s PSUs performance. It is one of unique longitudinal-empirical studies on India’s PSU performance in several dimensions.

The present study aims to examine the short-term effect of disinvestment oriented IPOs and FPOs on the stock market performance of Indian central public sector enterprises (CPSEs), which divested their equity between 2000 and 2017.

The analysis of stock price reaction is conducted for listing dates only in the case of IPOs and three different dates in the case of FPOs through the event study methodology. The three-event dates related to FPOs are public notification date (PND), issue announcement date (IAD) and price band date (PBD).

Overall empirical analysis indicates that investor sentiments are generally insignificant prior to and posts the PND (first date). The second major date of announcement that is (IAD) is new information in the market and returns are found to be significantly negative across both the periods that is before and after IAD. Thus, the analysis depicts strongly negative investor sentiments in the case of IAD. These results are further substantiated by negatively significant CAR (cumulative abnormal returns) values for both the pre and post-event windows of PBD as well.

Empirical analysis concludes that investors do not stand a chance to gain abnormal returns through initiating positions in the stocks of CPSEs during the alternative event dates analyzed.

Since the year 2000, disinvestment through public offering has gathered momentum, and this mode accounts for approximately 62% of the collective disinvestment funds generated by the government of India till now. But there have been very limited research studies on the market performance of disinvested CPSEs. This analysis provides new empirical evidence for the market reactions of retail investors in response to the sale of equity by the Indian government in CPSEs.

This paper empirically examines the impact of corporate governance reforms on the financial performance of Indian state-owned enterprises (SOEs) for the period 2003–2011.

The findings indicate that the various corporate governance reforms collectively exhibited a statistically significant positive impact on performance when a difference in difference estimation process is used. However, the performance of SOEs is less than that of publicly listed companies, which is consistent with prior research. When the SOEs are compared with a matched pairing of publicly listed companies of similar size and same industry, their performance was comparable and in many instances superior. This is indicative of the regulatory constraints on competitors and preferential access to resources and markets given to the SOEs. As SOEs move towards a more mixed ownership model with more of them listed on the stock exchange and greater public ownership of shares the corporate governance issues will increase in importance.

The controlled sell down of shares in SOEs presents a need for continuing governance reforms and ongoing research to track progress.

The most striking observation from the study is that changes that were introduced as a corporate governance reform, such greater professionalism in boards, did not gain traction and enhance performance, rather the process of director selection and the concentrated bureaucratic and political interference stymied what was asserted to be conceptually sound reforms.

Increasing the share of small and medium enterprises (SMEs) in public procurement through targeted support policies is often fraught with organisational and institutional challenges as can be seen from the experiences of many developed countries. This has profound implications for emulating such policies in developing countries where administrative capacities may be low for efficient policy management. The purpose of this paper is to widen the canvass of SME procurement policy discourse by exploring a developing country context.

The study provides qualitative assessment using insights from policy implementation-related theories. Due to limited reporting of target data on SME participation in India, the study conducts analysis based on key informant interviews with 20 public sector enterprises.

The evidence drawn from India mainly shows uneven performance among the procurers in achieving the SME procurement targets, and reveals serious policy implementation shortcomings. These findings correspond and complement the earlier studies on SME procurement in the developed world. The Indian case additionally reveals barriers which may be common to other developing countries such as the lack of policy-administrative capacity compounded by the prevalence of “efficiency syndrome” on the part of procurers.

By providing an in-depth developing country-specific assessment, the study helps informing assumptions underpinning SME-oriented procurement policies. The study, therefore, fills a gap in the literature on SME-oriented public procurement policy-making and its execution.

The purpose of this paper is to report empirical research about the chronological development of the organizational structure, functions (functional groups) and competencies of the corporate communication(/public relation) – CC(/PR) department of the central public sector enterprises (CPSEs) in India. This paper also attempts to identify the specific organizational goals that influence CC(/PR) departmental structure and its effectiveness.

In total, 34 selected CPSEs reflecting most of the salient features of the public sector in India are identified. Key personnel (or designates) in the CC(/PR) departments are contacted to take an online survey that is built after analyzing previously reported instruments appropriate in this context. Analyses are conducted using SPSS 10.0.

Data analysis shows that in many PSUs, the development of full‐fledged CC departments is still at a nascent stage; however, in other PSUs development of CC is already streamlined with company vision and is mature as a division. Key acceptable PR roles include communication for the desired perception among target audience and brand sustainability. In established CC departments, CC is a strategic management tool, synchronizing all intentional forms of internal and external communications, thus helping the PSUs to define its corporate image and improve corporate performance. Through the built‐in measurement systems, PSUs are encouraged to become global players.

The paper empirically measures the efficiency of CC(/PR) departments of 34 operating CPSEs concerned with the development of the engineering industry in India. This paper would be of value to researchers and practitioners seeking to promote, practice or influence the structuring of CC(/PR) departments.

This study aims to explore the weightage rendered to corporate social responsibility (CSR) keywords in mission and vision (M&V) statements of public sector enterprises (PSEs) in India.

Analysing the contents of M&V statements of 230 PSEs, this study has the twin research objectives of seeking to illuminate the current use of CSR-related keywords in PSEs’ M&V statements that reflect organisational strategy and provide an understanding for how firm age, industry and firm size variables serve to influence CSR keyword reporting in these statements.

The findings of this study provide evidence that half of the Indian PSEs reported at least one CSR-related keyword in their M&V statements. These public enterprises predominantly use 38 different categories of CSR keywords in their M&V statements. Furthermore, the authors find that environment-related keywords were predominantly used by PSEs in their M&V statements. The results indicate that PSEs’ size and industries are significantly associated with the use of CSR-related keywords in M&V statements, suggesting that bigger PSEs and PSEs in extractive industries (e.g. mining, coal and petroleum) tend to report more CSR-related keywords in their M&V statements.

Findings imply that small public enterprises (those having a low annual turnover) lack CSR focus in their M&V statements. The authors argue that, irrespective of the size of the enterprise, CSR should be an integral part of these PSEs in framing their M&V statements.

This study systematically analyses CSR-related keywords in the M&V statements of all PSEs in India.