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Memorandum of Understanding (MoU) Framework of the Department of Public Enterprises (DPE), Government of India, applicable for Central Public Sector Enterprises (CPSEs):

1. Objective:

• A key ownership functions of the Government being the majority shareholders of Central Public Sector Enterprises (CPSEs) is to undertake regular performance evaluation of CPSEs, to assess their efficacy towards fulfilment of core objectives for which these have been constituted.
• The MoU framework is designed to evaluate the performance of CPSEs based on quantifiable and verifiable parameters (Audited Accounts and Annual Reports). It aims to shift focus from effort-based assessments to actual economic performance, aligning with government priorities and shareholder interests
• These parameters are carefully benchmarked against past performance, future projections, sectoral standards, and the vision of the administrative ministry i.e Ministry of Power.
• The MoU framework is designed to reflect market-oriented and shareholder-focused performance indicators.

2. Scope:

• Department of Public Enterprises (DPE) is responsible for finalizing Memorandums of Understanding (MoUs) for Central Public Sector Enterprises (CPSEs). These MoUs serve as strategic tools to evaluate the performance of CPSEs
• Applicability: All CPSEs, including holding and subsidiary companies, are required to sign MoUs.

3. MoU Parameters:

Parameters are grouped and weighted, with flexibility to redistribute weights if certain parameters are non-applicable. Key categories include:

          

4. Evaluation & Rating:

• Self-evaluation: CPSEs submit verified data via the PE Survey Portal. (https://pesurvey.dpe.gov.in/Home.aspx)
• Scoring: Proportional marks awarded for 50–100% achievement; below 50% gets zero (except for specific cases).

 

Excellent	Score ≥ 90
Very Good	70 ≤ Score < 90
Good	50 ≤ Score < 70
Fair	33 ≤ Score < 50
Poor	Score < 33

5. Guidelines

DPE from time to time has formulated MoU framework implementation guidelines and can be accessed here: https://tinyurl.com/bdz9mhac

Current applicable guideline for FY 2025-26 and onwards can be accessed here:  https://tinyurl.com/3r9fx8tc

Status of MoU target and evaluation

FY	Target	Result
2025-26		-
2024-25		Not evaluated by DPE yet.
2023-24		Excellent
2022-23		Excellent
2021-22		Very Good
2020-21		Excellent