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

The private sector has been going slow in adding fixed assets but squeezing out more

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