How spend, spend is giving state-owned companies diminishing returns

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Illustration: Binay Sinha

Government companies are likely to be nudged to spend more on setting up new factories and other assets in a capital expenditure (capex) push. But they have been making less money than before from earlier investments.

Public sector businesses earn less than Rs 8 for every Rs 100 worth of net fixed assets, shows data compiled from the Centre for Monitoring Indian Economy (CMIE) which looked at non-financial entities. The private sector earns twice as much or more.

A rise in net fixed assets amid poor demand diminishes returns. Government companies’ net fixed assets went up 14 per cent annually

First Published: Jan 26 2024 | 1:26 PM IST

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