Now, public sector companies allowed to buy cars of up to 2,500 cc for staff

Senior executives of central public sector enterprises (CPSEs) can now upgrade their existing staff car fleet and opt for better models.

The Department of Public Enterprises (DPE) has issued fresh guidelines allowing companies to purchase cars of up to 2,500 cc, an upgrade from the earlier limit of 2,000 cc, with the condition that the cars must be manufactured in India, fuel-efficient and purchased with the prior approval of the board of directors. "CPSEs may purchase models of vehicles manufactured in India, not exceeding 2,500 cc, for staff car purposes and field visits," said the guidelines, which were sent to all Ratna CPSEs last month.

The type of car to be selected for purchase would depend on factors such as the schedule of the CPSE, Ratna status, pay scales adopted and financial prudence.

While the government supports the use of electric and hybrid vehicles, it has said that CPSEs must consider their financial position before opting for hybrid or electric vehicles, which are more expensive than petrol and diesel versions.

The guidelines also allow for the replacement of existing vehicles, but with certain conditions. Any replacement will require prior approval from the board of directors, ensuring that the decision is transparent and in line with the organisation's financial goals.

The guidelines prohibit private use, imposing a monthly recovery of ₹2,000 for personal trips, while promoting a more responsible and sustainable approach to staff car management in CPSEs.

From time to time, the Department of Public Enterprises issues such guidelines as a fiscal discipline measure. In 2022, it had restricted CPSEs from using cars with engines larger than 2,000 cc for official use.