Public sector undertakings (PSUs) are state-owned enterprises that operate in various sectors of the Indian economy. PSUs play an important role in job creation, infrastructure development, capital formation, and economic growth. They are classified as Maharatnas, Navratnas, Miniratnas or other PSUs based on their financial performance and autonomy. Some of the largest PSUs in India include Indian Oil Corporation, Coal India Limited, ONGC, and NTPC. PSUs have contributed significantly to India's development but their role has reduced over time as the economy has liberalized.

1. PUBLIC SECTOR UNDERTAKINGS
OF INDIA
Parth Mehta
Presentation on Public Sector Undertakings 1

2. What is Public Sector ?
Presentation on Public Sector Undertakings 2

3. Presentation on Public Sector Undertakings 3
• That portion of an economy that is controlled by national, state
or provincial, and local governments.
• It is one of the largest sectors of any economy.
• A state-owned enterprise in India is called a Public Sector
Undertaking (PSU) or a Public Sector Enterprise.
• These companies are owned by the union government of India,
or one of the many state or territorial governments, or both.
• PSUs may be classified as Central Public Sector Enterprises
(CPSEs), public sector banks (PSBs) or State Level Public
Enterprises (SLPEs).

4. History of Public Sector in India
Presentation on Public Sector Undertakings 4

5. Presentation on Public Sector Undertakings 5
• 1947 – India was primarily an agricultural economy.
• Prior to 1947 - public sector investment was limited to the
railways, the post and telegraphs department, the ordnance
(defence) factories and a few state managed factories like the
quinine factories, salt factories etc.
• After Independence, the area of activities of the public sector
expanded at a very rapid speed.
• most of the banks, financial corporations, railways, air transport,
etc., are in the public sector, the entire agricultural sector (which
was the largest sector of the economy) has been left for the
private sector.

6. Presentation on Public Sector Undertakings 6
• The first industrial policy was announced in 1948, it laid
down broad contours of the strategy of industrial
development.
• The major consideration for the setting up of PSUs was to
accelerate the growth of core sectors of the economy; to
serve the equipment needs of strategically important
sectors, and to generate employment and income.
• The growth of public enterprises in India has taken place in
two ways:
(a) By nationalising existing enterprises and
(b) By starting new enterprises.

7. Role of Public Sector in the
Indian Economy
Presentation on Public Sector Undertakings 7

8. Presentation on Public Sector Undertakings 8
1. Creation of Job Opportunities:
Nearly 70 % of labourers are working in public sector
i.e. out of 235 lakhs labourers, approximately 195 lakh are
engaged in the organised public sector. More than 17 lakh
people are employed in the Indian railways.
2. Strong Industrial Base:
The contribution of industrial sector i.e., manufacturing,
construction, electricity in GDP at Factor Cost has raised slowly
and steadily during the plan periods. It was only 13.3 % in
1950-51 to 21.6 % in 1980-81 and further to 24.5 % in 2003-
04.

9. Presentation on Public Sector Undertakings 9
3. Development of Infrastructure
Infrastructure is considered as the backbone of the Indian
economy.
The large industries are set up with proper capital formation
regarding the development of all types of transport, power and
effective resource mobilisation. The main aim behind building all
the PSUs was to make better economic development in future.
4. Capital Formation and Public Sector
The PSUs are playing a dominant role to channelize savings
into regular investment. In the 1st and 2nd five year plans 54 % of
total investment was in public sector and in 3rd plan it had
increased further to 60 %. However, thereafter there was
tremendous fall in invest rate, i.e., 45.7 % in 7th plan, 34.3 % in 8th
plan and 29.5 % in ninth plan.

10. Presentation on Public Sector Undertakings 10
5. Export Promotion and Import Substitution
A number of PSUs have contributed a lot for increasing
the foreign exchange reserves. The foreign exchange reserve
had increased from Rs. 35 crores in 1965-66 to Rs. 34890
crores to 2004-05 due to increase in export promotion.
6. Social Welfare
It is the public sector, which always thinks for the
growth and welfare of the weaker sections of the country.
Public sector is always working with the motive of social
welfare maximisation. Most of public sectors run with the
motive of no profit and no loss ideology.

11. Presentation on Public Sector Undertakings 11
7. Economic Growth
PSUs take huge endeavour to remove regional imbalances
within the country. It channelizes the complete banking facility and
process of industrialisation not only in the main cities and towns of
Indian villages but other backward areas also.
8. Positive check on Monopoly Control
Public sector has the potential to reduce inequalities of
income and wealth and concentration of monopoly power in
different ways, like;
(a) Channelize the profits on the social welfare programmes;
(b) Supply the important raw materials at low prices to the small
and tiny scale industries;
(c) Increase the minimum wages to the labourers;
(d) Production of socially required necessary goods etc.

12. Presentation on Public Sector Undertakings 12
9. Add Revenues to the Government Treasury
Public sector units add huge revenue to the
Government treasury through excise duty, customs
duty, dividend, profits and other direct taxes.
It thus helps to increase a bulk amount of
resources for a sustainable planned economic
growth.
Public sector contributed Rs.7,600 crores in
1980-81 and then raised the contribution to Rs.
1,10,600 crores in 2004-05.

13. Presentation on Public Sector Undertakings 13
Classification of Public Sector
Undertakings

14. Presentation on Public Sector Undertakings 14
PSU
Maharatnas Navratnas Miniratnas
Category I
Category II
Other

15. Presentation on Public Sector Undertakings 15
The Maharatnas
• The objective of the scheme is to delegate
enhanced powers to the Boards of identified
large-sized Navratna CPSEs.
• Eligibility Criteria
– Listed on the Indian stock exchange
– Average turnover- more than Rs. 20000 Cr.
– Average net worth - more than Rs. 10000 Cr.
– Average net profit – more than Rs. 2500 Cr.

16. Presentation on Public Sector Undertakings 16
The Maharatnas
• List of Maharatnas of India
1. Bharat Petroleum Corporation Limited (BPCL)
2. National Thermal Power Corporation (NTPC)
3. Oil and Natural Gas Corporation (ONGC)
4. Steel Authority of India Limited (SAIL)
5. Bharat Heavy Electricals Limited (BHEL)
6. Indian Oil Corporation Limited (IOCL)
7. Coal India Limited
8. Gas Authority of India Limited (GAIL)

17. Presentation on Public Sector Undertakings 17
The Navratnas
• The government introduced the Navratna scheme
in 1977
• The government has delegated higher powers to
CPSEs having a comparative advantage and the
potential to become global players
• Eligibility
– A score of 60 out of 100 based on 6 parameters
– A company must first be a Miniratna
– Must have 4 Independent directors on its board

18. Presentation on Public Sector Undertakings 18
The Navratnas
• There are total 16 Navratnas a few of them are:
1. Container Corporation of India (CONCOR)
2. Hindustan Aeronautics Limited (HAL)
3. Hindustan Petroleum Corporation
Limited (HPCL)
4. Mahanagar Telephone Nigam Limited (MTNL)
5. Power Grid Corporation of India
6. Shipping Corporation of India

19. Presentation on Public Sector Undertakings 19
The Miniratnas
• In October 1997, the Government decided to
grant enhanced autonomy and delegation of
financial powers to some other profit making
companies (other than the Navratnas) subject
to certain eligibility conditions and guidelines
to make them efficient and competitive.

20. Presentation on Public Sector Undertakings 20
The Miniratnas
• Eligibility for Miniratna – I
– Should have made profit in the last three years
continuously.
– Pre tax profit should have been Rs. 30 crore or more
in at least one of the three years
– Should have a positive net worth
– They have not defaulted in the repayment of
loans/interest payment on any loans due to the
Government
• There are 59 PSUs identified under the
Miniratna – I category

21. Presentation on Public Sector Undertakings 21
The Miniratnas
• Eligibility for Miniratna – II
– Should have made profit in the last three years
continuously.
– Should have a positive net worth
– They have not defaulted in the repayment of
loans/interest payment on any loans due to the
Government
• There are 15 PSUs identified under the Miniratna – II
category

22. TOP 10 PUBLIC SECTOR
UNDERTAKINGS OF INDIA
Presentation on Public Sector Undertakings 22

23. Presentation on Public Sector Undertakings 23
10. Bharat Heavy Electricals Limited
9. Power Finance Corporation

24. Presentation on Public Sector Undertakings 24
8. Hindustan Petroleum
7. Power Grid Corporation of India

25. Presentation on Public Sector Undertakings 25
6. Gas Authority of India Limited
5. Coal India Limited

26. Presentation on Public Sector Undertakings 26
4. Bharat Petroleum Corporation
Limited
3. National Thermal Power
Corporation

27. Presentation on Public Sector Undertakings 27
2. Oil and Natural Gas Corporation
1. Indian Oil Corporation Limited

28. Presentation on Public Sector Undertakings 28
To Conclude
• The Public Sector Undertakings have been the growth
drivers of the Indian Economy.
• Their importance in the development of the country
can’t be overlooked.

29. Bibliography
• (n.d.). Retrieved from The Hindu Business Line:
http://www.thehindubusinessline.com/news/national/psus-urged-to-emulate-
cooperative-sector/article9970937.ece
• (n.d.). Retrieved from www.khabarindia.in: https://www.khabarindia.in/public-
sector-undertakings-psus-growth-engines-nation/
• (n.d.). Retrieved from www.mbaskool.com: https://www.mbaskool.com/fun-
corner/top-brand-lists/17202-top-10-public-sector-psu-companies-in-india-
2017.html
• (n.d.). Retrieved from BSE PSU: www.bsepsu.com
• (n.d.). Retrieved from Dalal Street Investment Journal: http://www.dsij.in/article-
details/articleid/19669/indias-best-psus-2016-awards
• (n.d.). Retrieved from Wikipedia.org:
https://en.m.wikipedia.org/wiki/Public_sector_undertakings_in_India
• (n.d.). Retrieved from Business Maps of India:
https://business.mapsofindia.com/sectors/public/
• (n.d.). Retrieved from Rediff.com: http://www.rediff.com/business/slide-
show/slide-show-1-indias-20-profit-making-psus/20120321.htm
• Govt. of India. (n.d.). Retrieved from Department of Public Enterprises:
http://dpe.gov.in/about-us/management-division/maharatna-navratna-miniratna-
cpse
• NIC. (n.d.). Retrieved from Power Ministry of India:
http://powermin.nic.in/en/content/public-sector-undertakings
Presentation on Public Sector Undertakings 29