PSU (Public Sector Undertaking)

All about Public Sector Undertakings issues in india. The PSU has laid a solid foundation for the country’s industrial development

What are Public Sector Undertaking (PUS) Companie ?

Let’s start with the acronym itself. PSU represents Public Sector Undertakings. It means a business activity, a company, a state-owned business that does not belong to the people of India. In some cases, PSEs are also called PSEs, i.e. Public Sector Enterprises, when the verb name is considered old. So to put it bluntly, we can say that “The state-owned enterprise is called the PSU and with the majority of the PSU, which is 51% or more, the budget is held by the Indian government. , or by provincial governments, or by a combination of both. ” In the case of a central government PSU it will be called CPSE and if it is governed by the state, it will be called SPSE.

There are a total of 339 CPSEs in India according to a list provided by the Department of Public Enterprises (DPE). A total of 97 of these CPSEs and SPSEs are listed on the BSE. (Read more: List of complete PSUs in India)

Why PSUsd?

Now, the next question that may come to your mind may be “Why do we need PSUs”, Ummm, it is very good to ask. The growth and availability of resources, resources, industrial change, the products we see today did not exist in the era of freedom. As soon as the country gained independence from British rule, he arose and faced serious economic problems around him. Socio-economic inequality, weak industrial bases, unemployment, inadequate investment, limited infrastructure, and lack of education and skills as a whole. India was already late in catching the train of industrial revolution as the British used India in the colony only to grow raw materials and later as buyers of their recycled products in England.


In order to prevent these problems and to put India on the path of development, a Public Sector Works program was developed. India has adopted strategic economic development policies, aimed at the development of PSUs. The first Indian Prime Minister Pt. Nehru believed that the establishment of basic and heavy industries was crucial to the development and development of the Indian economy.
“The state-owned enterprise is called the PSU and with the majority of the PSU, which is 51% or more, the budget is owned by the Indian government, or the provincial governments, or a combination of both.

India’s second five-year plan (1956–60) and the Industrial Policy Resolution of 1956 emphasized the development of state-owned enterprises to meet Pt. Nehru national industrial policy. His vision was further developed by Dr. V. Krishnamurthy known as the “Father of Public Works in India”. The government therefore decided to build key industries in strategic sectors such as Oil and Gas to Steel, Power Generation in the first phase. So PSUs were developed such as ONGC, EIL, Indian Oil, BHEL.


Later in the second phase when the current government introduced national inclusion of industries, banks, the acquisition of private patient facilities, Public Sector Agreements expanded from depth to various other productive sectors such as consumer goods (from bread to watches to cars and scooters) to public relations. , contract and transport etc.

Audit of PSUs

The Comtroller and Auditor General of India (CAG) audits state-owned companies. In the case of state-owned enterprises, the CAG has the power to appoint an Auditor-General and to oversee the Auditor-General’s audit of corporate accounts. (Read more: How many PSUs make a profit in India)

Industrial PolicyIn

accordance with Industrial Policy Resolution 1956, Government has primarily divided the Industry into three categories in terms of the role played by the State – Phase A (Schedule A) brought together industries whose future development would be a special function of the State. Although the second phase (Schedule B) involved their Entities their development efforts are mainly to be run by the State but private participation will also be allowed to supplement the State’s efforts. Also, the third category included the remaining industries, which were left to private companies. The MRTP action in 1969 brought some limitations to this third phase which was re-established in 1973.

However, in 1991 freedom redefined the role of PSUs in India. The Industrial Policy Statement of July 1991 brought significant changes. It has made significant changes to the MRTP (Monopoly and Restricted Trade Practices) Act as well. The statement reviewed the priority of the public sector.

Type of PSUs

Depending on its annual profitand profits

PSUs have 3 categories: Maharatna, Navratna, Miniratna-1 and Miniratna-

2. (Read more here: How to determine PSU Maharatna, Navratna, Miniratna or No’ratna)

Role of PSUs in India

The Public Sector Undertakings (PSUs) has laid a solid foundation for the country’s industrial development and is still a major source of job creation in government. Since PSUs do not bother to make a profit, they play a vital role in nation-building activities, bringing the economy to the right place. PSUs provide assistance to Government (its controlling shareholder) to intervene in the economy directly or indirectly in order to achieve desirable socio-economic goals and to promote long-term goals. For example, the government has acquired about 80,000 Crore through the demolition of PSUs in FY 2018-19.

In a neoliberal world and a situation that is increasingly challenging, the business environment of PSUs has also changed dramatically. The Maharatnas, Navratnas and other Miniratnas make their presence heard on the international stage and compete with world champions. The competition has brought about a dramatic change in the way PSUs are perceived in terms of their roles and responsibilities, their ownership and management as well as their independence and ethics.


Certain public sector activities have been rewarded with additional financial independence. These companies are “public sector companies with comparable profits”, which give them greater independence to compete in the global market to “support themselves in their quest for world power”. [18] Financial independence was initially awarded to nine PSUs as a state of Navratna in 1997. [19] Originally, the name Navaratna meant a talisman composed of nine gemstones. Later, the name was adopted in the courts of Gupta Emperor Vikramaditya and Mughal Emperor Akbar, as a combined name of nine extraordinary officers in their courts.
In 2010, the government established the Maharatna executive unit, which increased the company’s investment from R1,000 crore to R5,000 crore. [20] Maharatna companies can now decide on an investment of up to 15 percent of the total cost of the project while Navaratna companies can invest up to R1,000 crore without explicit government approval. The two divisions of Miniratnas offer broad financial independence