India’s 383 Ghost Companies With No Work, No Revenue, Still On The Books
383 government-run companies in India currently report no meaningful business activity, yet they continue to exist on official records. These ghost companies raise an uncomfortable question: in a resource-constrained economy, why are hundreds of state-owned firms effectively doing nothing?
In a country where every fiscal allocation is scrutinised and every subsidy debated, a quieter anomaly sits embedded within the system. India currently has 383 government-run companies that are effectively inactive, generating no meaningful business activity while continuing to exist as registered entities. Often described as “ghost companies,” they are neither headline-grabbing loss-makers nor strategically vital enterprises under stress. Instead, they are organisations that, for all practical purposes, do nothing – yet remain part of the public sector ecosystem.
What the Data Actually Shows
The 383 entities include a mix of central public sector enterprises, state government companies and subsidiaries that fall within the broader oversight framework of the Department of Public Enterprises. Many of them report negligible or zero turnover, no active production, and in certain cases, no employees or ongoing projects.
Despite the absence of operational activity, these companies continue to exist legally. They require statutory audits, annual filings, board-level compliance and regulatory reporting. In other words, while their business engines have stopped, their administrative existence has not.
The distinction here is important. These are not necessarily companies haemorrhaging large losses year after year. Many are simply dormant — inactive, idle and awaiting either revival, merger or formal closure. The problem lies in the scale of this dormancy.
How Did We Get Here?
To understand why these companies exist in this state, one must revisit the origins of India’s public sector expansion.
Post-Independence, public sector undertakings were conceived as instruments of industrial growth, employment generation and strategic autonomy. The state assumed control in core sectors ranging from heavy industry to telecommunications because private capital was scarce and developmental priorities were urgent. Over decades, this led to a sprawling public enterprise ecosystem.
However, economic liberalisation in 1991 reshaped the competitive picture. As private players entered sectors once dominated by state enterprises, inefficiencies within some PSUs became increasingly visible. While several restructured and adapted, others gradually became redundant. Some were privatised. Some were merged. And some quietly drifted into inactivity without being formally dissolved.
What we see today is partly the residue of that long transition.
But Why Do They Continue to Exist?
The persistence of these entities is not accidental; it is institutional.
Bureaucratic and Legal Complexity
Closing a government company is rarely straightforward. It requires asset valuation, settlement of liabilities, employee compensation (where applicable), debt reconciliation, and often Cabinet-level approvals. If land assets are involved (particularly in urban areas) valuation disputes and legal claims can stretch for years. In such circumstances, administrative inertia often prevails over decisive closure.
Litigation and Legacy Disputes
Many dormant companies are entangled in court cases involving contractors, tax authorities, environmental clearances or unresolved financial claims. Until litigation is resolved, formal liquidation becomes legally difficult. As a result, these entities remain in a holding pattern.
Political Sensitivity
Even if a company has minimal operational presence, its closure can become politically charged, especially in states where public sector employment has symbolic value. Governments may choose delay over confrontation.
Asset-Holding Structures
Some companies effectively function as asset-holding vehicles, particularly where they control land banks or legacy infrastructure. Rather than dissolving them, authorities may prefer to retain the corporate shell for future restructuring or monetisation.
The Financial Footprint of Inactivity
It would be misleading to assume that inactive equals costless.
Even dormant companies incur compliance and administrative expenses. Statutory audits must be conducted. Annual filings with the Registrar of Companies are mandatory. Boards, however skeletal, must be maintained. Legal retainers and record-keeping obligations continue. Pension or residual employee liabilities may persist.
Oversight bodies such as the Comptroller and Auditor General of India periodically flag inefficiencies in public sector management. While the per-entity cost of maintaining a dormant company may appear modest in isolation, multiplying that figure across 383 entities transforms it into a non-trivial fiscal question.
A Governance Contradiction
Successive governments have articulated a commitment to efficiency, asset monetisation and rationalisation of non-strategic public sector enterprises. The principle of “minimum government, maximum governance” has been invoked to justify privatisation drives and consolidation initiatives.
Yet the continued presence of hundreds of inactive companies introduces a visible contradiction. If reform aims to sharpen the state’s strategic focus, then prolonged institutional limbo signals unfinished business.
This is not merely an accounting anomaly. It reflects the broader challenge of managing legacy structures in a rapidly evolving economic environment.
What Can Be Done?
Addressing the issue requires structural clarity rather than episodic announcements.
Time-Bound Closure Framework: Companies that remain non-operational beyond a defined number of years could be automatically referred for merger, liquidation or restructuring.
Strategic Consolidation: Dormant subsidiaries may be merged into stronger parent PSUs to reduce duplication and administrative overhead.
Accelerated Asset Monetisation: Where valuable land banks are involved, transparent monetisation mechanisms could convert idle assets into productive capital.
Sunset Clauses: Introducing automatic review mechanisms for government companies could prevent indefinite dormancy.
The Last Bit, Ghost Companies
The existence of 383 inactive government-run companies is not, by itself, evidence of corruption or scandal. It is, however, a sign of administrative drift. Public enterprises were created to serve economic and strategic objectives. When those objectives disappear but the corporate structure remains, the state inherits an accountability gap.
In a developing economy balancing fiscal discipline with social responsibility, institutional clarity matters. Reform is not only about creating new initiatives; it is also about resolving what no longer serves a purpose. Whether through consolidation, closure or repurposing, these dormant entities represent a test of governance maturity – and a reminder that efficiency is measured not only by what governments build, but also by what they are willing to let go.
