Stronger push for accountability: Evaluation tightened, faltering CPSEs to face strict penalties

New Delhi: The Centre has tightened annual performance norms for central public sector enterprises (CPSEs), with strict penalties for failing to meet corporate social responsibility (CSR) obligations, delaying payments to micro, small and medium enterprises (MSMEs) or falling short of preparing a succession plan.

Going forward, any deviation from mandatory CSR activities or MSME procurement rules will result in a full deduction of marks assigned to these performance parameters, according to the new parameters to assess the annual performance of each CPSE for FY27. These parameters are fixed annually.

The move is aimed at signalling a stronger push for accountability and timely support to small businesses, officials said.


The Centre circulated the guidelines to the CPSEs in the first week of this month.

The parameters were set by a high-powered committee chaired by the cabinet secretary, which had officials from Niti Aayog, chairperson of the public enterprise selection board, and secretaries from the finance ministry as its members.

"The new parameters are aligned with the vision of Atmanirbhar Bharat, supporting small enterprises and strong corporate governance," said an official.

CPSEs are mandated to disclose the number and amount of bills pending and paid during a financial year in their annual reports and failure to report will attract penalty of full marks. CPSEs will also be assessed on research and development (R&D) and innovation initiatives. This parameter will be mandatory for all CPSEs that rely on imports to foster a culture of innovation and technological advancement and CPSEs will be assessed on how much they spent on the R&D in the last three years.

CPSEs have also been asked to reduce their import dependency in a phased manner. The target for import reduction will be set by the concerned administrative ministries.