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Governance, Politics, and Performance: Understanding the Dynamics of Indian State-Owned Enterprises

Book Title: Transformative Approaches in Multidisciplinary Research (TAMR)

Chief Editors: Dr. Meenakshi Kujur, and Dr. Hamidun Bunawan

Associate Editors: Mr. Gunjit Singhal, and Dr. Asma Farooque

Co-Editors: Dr. Suresh Kamarapu, and Dr. Souvik Sur

Chapter: 15

DOI: https://doi.org/10.59646/672/15

Authors: Jibin Mathew, and Maria J Thevara

Abstract

State-owned enterprises (SOEs) have historically played a critical role in India’s economic development, contributing to infrastructure, energy, finance, and social welfare. However, their performance has often been questioned due to inefficiencies, low profitability, and governance challenges. One major factor influencing SOE performance is political interference. Political patronage, appointment of politically connected managers, resource misallocation, and excessive government control often undermine operational efficiency and long-term competitiveness. This conceptual/review paper explores the relationship between political interference and SOE performance in India. Drawing upon global and Indian literature, the study synthesizes theoretical perspectives, identifies mechanisms of political influence, and reviews evidence on its impact on financial, operational, and social outcomes of SOEs. Comparative insights from international experiences are also highlighted to situate the Indian case in a broader context. The paper further proposes a conceptual framework linking political interference with SOE performance outcomes and concludes with recommendations for governance reforms.

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