PSU

Public Sector Undertaking

Public Sector Undertakings (PSUs) are government-established and owned companies, either by the Indian central government or state governments. Known as government-owned enterprises, corporations, statutory corporations, or nationalised corporations, PSUs have been pivotal in driving India's economic growth. 

Defined as entities with at least 51% government ownership, PSUs are classified into Central Public Sector Undertakings (CPSUs) and State Public Sector Undertakings (SPSUs). Over time, they have expanded from strategic sectors like communication and heavy industries to include consumer goods and services, significantly contributing to infrastructure development and employment.

Historical Background

Following India's independence in 1947, the government prioritized industrialization to boost economic growth. The Industrial Policy Resolution of 1956 laid the foundation for the establishment of PSUs, focusing initially on strategic sectors. Over the years, PSUs have grown in number and scope, with significant milestones including the nationalization of banks in 1969 and the creation of numerous industrial and service-oriented enterprises.

Classification and Management

PSUs are granted different statuses based on their financial performance: Maharatna, Navratna, and Miniratna. Maharatna PSUs enjoy the highest level of financial autonomy, allowing them to make substantial investments without government approval. Navratna and Miniratna statuses also provide varying degrees of autonomy to enable PSUs to compete globally. 

Each PSU is managed by a board of directors appointed by the President or Governors of India, ensuring robust governance structures.

Financial Performance and Impact

PSUs have been instrumental in generating significant revenue and profits. For instance, in the financial year 2021-22, top-performing CPSUs like ONGC, IOCL, and NTPC collectively earned substantial profits, contributing to the national exchequer. 

Their strategic importance and financial contributions underscore their role in India's economic framework.

Conclusion

Public Sector Undertakings remain a cornerstone of India's industrial and economic strategy. By leveraging technological advancements and maintaining a focus on strategic sectors, PSUs continue to drive growth, enhance infrastructure, and provide employment opportunities, playing a crucial role in the nation's development journey.