Its Overview, History, Features, Categories and Some Famous PSUs [Current Affairs]

Public Sector Undertakings (PSUs), also known as Public Sector Units (PSUs) or Public Sector Enterprises (PSEs), are government-owned entities in India. These enterprises may be owned either entirely or partly by the Central or State Governments. PSUs are categorized into Central Public Sector Undertakings (CPSUs) and State Level Public Sector Undertakings (SLPSUs), with ownership either by the Central Government or the State Governments, respectively.

Full Form of PSU

PSU stands for Public Sector Undertaking. It refers to government-owned corporations in India, where either the Central Government or State Governments hold a majority stake, or complete ownership. These entities are established to carry out commercial activities and play a significant role in the country’s economy, particularly in key sectors like banking, energy, and infrastructure.

What is a PSU?

A PSU is a company where the Central Government or one or more State Governments, either individually or together, controls the management or has the authority to select a majority of directors. They are often referred to as statutory corporations, nationalized corporations, and government-owned businesses. Depending on ownership, PSUs can be either State Public Sector Undertakings (SPSUs) or Central Public Sector Undertakings (CPSUs).

History of PSU

When India gained independence in 1947, it was primarily an agricultural nation with limited industrial infrastructure. The government took steps to promote industrialization, starting with the Industrial Policy Resolution of 1948, which laid out the framework for industrial development. The second five-year plan (1956–1961) further emphasized the creation of state-owned enterprises. Dr. V. Krishnamurthy, known as the Father of PSUs in India, played a key role in advancing these efforts, based on Jawaharlal Nehru’s vision of industrialization.

Features of Public Sector Undertakings

• Government-funded: PSUs are either fully or majorly owned by the Indian government. The government holds more than 51% of their stock, giving it significant control over the operations.
• Government management: These organizations, though autonomous, are under the management and jurisdiction of the Indian government, ensuring compliance with national policies and objectives.
• Financial independence: PSUs manage their finances independently, formulating their financial plans without relying on government funds.
• Public Services: One of the primary goals of PSUs is to serve the public by providing essential services such as power, transport, banking, and more.
• Support for Economic Sectors: PSUs are involved in multiple sectors of the economy, such as energy, manufacturing, banking, and telecommunications, contributing to balanced economic growth.
• Implementation of Government Plans: PSUs play a crucial role in executing the economic and development plans set by the Indian government.

Categories of PSU

PSUs are classified into three main groups based on their level of operations:

• SLPEs – State Level Public Enterprises: These are owned by individual state governments.
• CPSEs – Central Public Sector Enterprises: These are owned by the central government.
• PSBs – Public Sector Banks: These include state-owned banks like the State Bank of India (SBI).

Famous PSUs in India

India has several prominent PSUs contributing to its economy. Some well-known PSUs include:

• CIL (Coal India Limited): The largest coal-producing company in the world.
• HPCL (Hindustan Petroleum Corporation Limited): A leading oil and gas company.
• BHEL (Bharat Heavy Electricals Limited): Specializes in heavy electrical equipment manufacturing.
• FCI (Food Corporation of India): Focuses on food security and distribution.
• SBI (State Bank of India): India’s largest public sector bank.
• SAIL (Steel Authority of India Limited): One of the largest steel producers.
• GAIL (Gas Authority of India Limited): Deals with natural gas processing and distribution.
• NTPC (National Thermal Power Corporation): India’s largest energy producer.
• PGCI (Power Grid Corporation of India): Manages electricity transmission networks.
• MTNL (Mahanagar Telephone Nigam Limited): Provides telecommunications services in metro cities.