Distribution of Performance Related Pay (PRP) in CPSEs – Consolidated and Revised guidelines on Determination of Core Business Activities for Calculation of Profit Before Tax (PBT): DPE O.M. dated 08.12.2025
सं० F. No. W-02/0016/2025-DPE (WC)- FTS-14312
भारत सरकार Government of India
वित्त मंत्रालय Ministry of Finance
लोक उद्यम विभाग Department of Public Enterprises
Public Enterprises Bhawan, Block No. 14,
C.G.O Complex, Lodhi Road, New Delhi-110003
Dated 8th December, 2025
Office Memorandum
Subject: Consolidated and Revised guidelines on Determination of Core Business Activities for Calculation of Profit Before Tax (PBT) and Distribution of Performance Related Pay (PRP) in CPSEs.
Reference:
1. DPE’s O.M. No. 2(60)/10-DPE (WC), dated 02.11.2010
2. DPE’s O.M. No. 2(8)/12- DPE (WC), dated 18.09.2013
3. DPE’s O.M. No. 2(8)/12- DPE (WC), dated 02.09.2014
Whereas the Department of Public Enterprises (DPE), vide its O.M.s No. 2(8)/12-DPE (WC) dated 18.09.2013 and 02.09.2014, addressed the above-cited subject, and whereas a need has been felt to define “core business activities” for the purpose of calculating Profit Before Tax (PBT) and distributing Performance Related Pay (PRP), the consolidated and revised guidelines are issued as follows:
2. Extraordinary items, including but not limited to valuation of stock, grants or waivers by Government, sale of land, and interest earned on idle cash/bank balances1, shall be deducted from PBT. PRP shall be distributed only on the basis of profits arising from core business activities of the CPSE 2 3. Extraordinary items shall include any non-recurring or non-operational income not arising directly from regular commercial operations.
3. CPSEs have been established to pursue specified objectives and to conduct business on a sustainable basis. Profits are expected to arise primarily from these objectives and through core business activities. CPSEs, in consultation with their respective Administrative Ministries/Departments, being best placed to assess sector-specific issues, shall identify and distinguish core business activities from non-core activities. Only those activities forming part of the Main Objects clause in the MoA shall be considered ‘core business activities’ for PRP calculation.
4. The deduction of non-core items from Profit Before Tax (PBT) for PRP calculation shall continue to apply with effect from FY 2012–13, while the revised definition of core business activities shall be applied prospectively from FY 2025-26 for PRP calculation. Revisions to the definition shall not entail any retrospective recalculation or revision of PRP for prior years.
5. Any ambiguity or dispute in the identification of core versus non-core activities shall be referred to the concerned Administrative Ministry/Department for resolution, in consultation with DPE if required.
6. All Administrative Ministries/Departments of the Government of India are requested to bring the above decision to the notice of CPSEs under their administrative control for strict compliance. Administrative Ministries/Departments may ensure that such classification is reviewed by the statutory auditors and certified in the annual PRP eligibility report.
7. This issues with the approval of the Secretary, Department of Public Enterprises.
(Dr. Sumantra Pal)
Economic Adviser
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