Public sector units (PSUs) evolved in India from pre-independence under the British to support post-independence industrialization. PSUs played key roles in the economy like generating income, employment, and infrastructure development. However, many PSUs faced issues like overstaffing, underutilization, and political interference. After 1991 reforms, the government restructured PSUs and pursued disinvestment and privatization. Today, while some large PSUs are very profitable, others remain loss-making due to challenges in planning, costs, and coordination. The overall performance of Indian PSUs is mixed, providing both positive and negative economic contributions.

1. Role of Public Sector Units
in Indian Industrialisation

2. Overview of The Presentation!
• Introduction
• Evolution of Public Sector Units
• Role of PSUs Indian Economy
• Critical Review and Reasons of
Failure
• Conclusion

3. Introduction
What is Public Sector Unit (PSU)?
Section 2 (45) of Companies Act, 2013 defines a
Government company to mean – any company in which not
less than fifty-one per cent of the paid-up share capital is
held by the Central Government, or by any State
Government or Governments, or partly by the Central
Government and partly by one or more State Governments
and includes a company which is a subsidiary company of
such Government company.
A. Introduction

4. Introduction
Independence:
British rulers and their tendency
towards the industrial development in
India.
Reforms of 1991:
(1) Globalisation
(2) Liberalisation
(3) Privatisation
A. Introduction

5. Evolution of PSUs
We can divide the evolution of PSUs in major 3
parts :-
1) Pre-independence (before 1947):-
2) Post-Independence (1947-1991)
3) After 1991 economic reforms
B. Evolution of PSUs

6. (1) Pre-independence (before 1947)
 British Rulers and their willingness..
 Major PSUs are:
Postage,Telegram,
Railway,Port Trusts, Aircraft Factories, Salt
factories and other factories..
B. Evolution of PSUs > (1) Pre-independence (before 1947)

7. (2) Post-Independence (1947-1991)
 In 1951 there where only 5 PSUs with a total capital
Investments of ₹29 crores..
 After that continuous rising of investment in public
sector enterprises up to 6th five year plan (1980-85).
 After 6th five year plan (1980-85), the relative share in
public sector investment in total investments is on
declining trend.
B. Evolution of PSUs > (2) Post-Independence (1947-1991)

8. (3) After 1991 economic reforms
 There were 298 CPSEs (excluding 7
Insurance Companies) with a total
investment of 10,96,057 crore as on 31st
March, 2015.
After July,1991 some necessary
steps were took place…like :
I. disinvestments
II. Restructuring (autonomy) of PSUs etc..
B. Evolution of PSUs > (3) After 1991 economic reforms

9. I. Disinvestments
Total Disinvestments
Year Amount (₹ crore)
1991 17,314
1995 678
2001 15,131
2005 3,590
2011 19,418
2015 33,690
2016 56,500 (Target)
0
20,000
40,000
60,000
Disinvestment
Disinvestment
*Note: 2016 figure is targeted
B. Evolution of PSUs > (3) After 1991 economic reforms > I. Disinvestments

10. II. Restructuring (autonomy) of PSUs
The Govt. has categorised the PSUs in three
categories on the basis of parameters like net profit,
net worth , total manpower cost, total cost of
production, cost of services, capital employed etc…
The main 3 categories are:
a. Maharatna
b. Navratna
c. Miniratna
 As on June 2016, there are 7 Maharanta, 17
Navratna and 73 Miniratna CPSEs..
B. Evolution of PSUs > (3) After 1991 economic reforms > II. Restructuring (autonomy) of PSUs

11. Maharatna PSUs
i. Bharat Heavy Electricals Limited (BHEL)
ii. Coal India Limited
iii. GAIL(India) Limited
iv. Indian Oil Corporation Limited
v. NTPC Limited
vi. ONGC Limited
vii.Steel Authority of India Limited (SAIL)
 Source: Publication of Department of Public Enterprises, Govt. of India.

12. Role of PSUs in Indian Economy
1) Generation of income
2) Capital Formation
3) Employment
4) Infrastructure Development
5) Strong Industrial Base
6) Export Promotion & Import Substitution
7) Contribution to Central Exchequer
8) Checking Concentration of Income and Wealth
9) Removal of Regional Disparities

13. Critical Review and Reasons of Failure
a) Poor Project Planning
b) Over-capitalisation
c) High Establishment Costs
d) Over-staffing
e) Under-utilisation of Capacity
f) Lack of Proper Price Policy
g) Unsatisfactory Industrial Relations
h) Lack of co-ordination
i) Lack of Motivation
j) Political Interference

14. Top 10 Profit Making CPSEs as on 31.3.2015
Sl. No. CPSE Name Net Profit
2014-15
%age
Share
1 Oil & Natural Gas Corporation Ltd. 17732.95 22.72
2 Coal India Ltd. 13383.39 17.15
3 NTPC Ltd. 10290.86 13.19
4 NMDC Ltd. 6421.86 8.23
5 Power Finance Corporation Ltd. 5959.33 7.64
6 Indian Oil Corporation Ltd. 5273.03 6.76
7 Rural Electrification Corpn. Ltd. 5259.87 6.74
8 Bharat Petroleum Corporation Ltd. 5084.51 6.81
9 Power Grid Corporation of India Ltd. 4979.17 6.38
10 South Eastern Coalfields Ltd. 3659.93 4.69
Total (1 to10) 78044.90 59.87
Net Profit of Profit making CPSEs 130362.50 100.00
(₹ in crore)
Source: Public Enterprises Survey : 2014-2015

15. 10 Major Loss Making CPSEs as on 31.3.2015
Sl. No. CPSE Name 2014-15
Net Loss Share %age
1 Bharat Sanchar Nigam Ltd. -8234.09 35.22
2 Air India Ltd. -5859.91 25.06
3 Mahanagar Telephone Nigam Ltd. -2893.39 12.38
4 Hindustan Photo Films & Mfg. Company Ltd. -2164.36 9.26
5 Mangalore Refinery & Petrochemicals Ltd. -1712.23 7.32
6 Hindustan Cables Ltd. -932.99 3.99
7 STCL Ltd. (Formerly Spice Trading Corporation) -412.59 1.76
8 Fertilizers & Chemicals (Travancore) Ltd. -399.91 1.71
9 Air India Engineering Services Ltd. -389.50 1.67
10 Hindustan Fertilizers Corporation Ltd. -380.75 1.63
Total (1 to 10) -23379.72 85.45
Net loss of loss making CPSEs: -27359.82 100.00
( ₹ in crore)
Source: Public Enterprises Survey : 2014-2015

16. Status of Gujarat Govt. PSUs (SPSEs)
During the year 2014-15, as per their latest
finalised accounts, out of 68 working SPSEs.
49 SPSUs earned profit of 3,725.62 crore
 13 SPSUs incurred loss of 613.17 crore.

17. Top Profit Making SPSEs
Sr.
No
PSU name ₹
( in
Crore)
1 Gujarat State Petronet
limited
660.32
2 Gujarat Gas Limited 641.44
3 Gujarat Mineral Development
Corporation Limited
635.87
4 Gujarat Energy Transmission
Corporation Limited
412.65
Top 4 Profit Making SPSEs
Top Profit Makers
GSPL
GGL
GMDCL
GETCO
Rest of
SPSEs
 Source: Report of the CAG on PSUs for the year ended 31 March 2015
Total Profit= 3,725.62 crore

18. Top Loss Making SPSEs
Sr.
No
PSU name ₹
( in
Crore)
1 Gujarat State Road Transport
Corporation
183.58
2 Gujarat State Energy
Generation Limited
130.03
3 Gujarat State
Financial Corporation
94.81
4 Gujarat Water Infrastructure
Limited
91.37
Top 4 Loss Making SPSEs
 Source: Report of the CAG on PSUs for the year ended 31 March 2015
Loss Making SPSEs
GSRTC
GSEGL
GSFC
GWIL
Rest of
SPSEs
TOTAL LOSS= 613.17 crore

20. Conclusion
 The Indian PSUs had given both types of
contribution in Indian Economy like Positive and
Negative.
 Burden of social responsibility of PSUs along with
business, so due to that some of the PSUs are not
performing well.
 We can say that the overall situation is on
Equilibrium .