What is PSU? All you need to know about PSU?

What is psu?

What is PSU?


The government-owned companies or corporations are termed as PSU (public sector undertaking) in India. It’s that portion of an economy that is controlled by national, state, or local governments.  

A PSU can be fully or partially owned by the government of India. It is the largest sector of any economy. In a PSU majority( 51% or more) of the paid-up share capital is held by any state government or partially by the central government and partially by one or more state governments.


In 1947 India was primarily an agricultural economy. Before 1947 public sector investment was limited to the railways, the post and telegraphs department, the ordnance(defense) 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 transports, etc are in the public sector, the entire agriculture sector (which was the largest sector of the economy) has been left for the private sector.

The first industrial policy was announced in 1948, it laid down broad contours of the strategy of industrial development. The major consideration for setting up 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.

  • By nationalizing existing enterprises
  • By starting new enterprises


Some important roles played by public sector in Indian economy are following !

  • Creation of job opportunities
  • Strong Industrial base
  • Development of Infrastructure
  • Capital formation and public sector 
  • Export promotion and import substitution
  • Social welfare
  • Economic growth
  • Positive check on monopoly control
  • Add revenues to the government treasury.


Classified Public sector undertaking (PSU)

Basically, Public sector undertaking (PSU) are classified into the following three categories :

1. Central Public-Sector Enterprises(CPSEs)

Companies that come under the direct control of the central government of India or other CPSEs by 51% or more than 51% of the capital share ownership that is called Central public sector enterprises(CPSEs)

Central public sector enteprises in further devided in two categories – Strategic CPSE and Non-Strategic CPSE.

Strategic Central Public-Sector Enterprises(SCPSEs)

In Under Strategic Central Public-Sector Enterprises(SCPSEs) – Arms, Ammunition and defense aircraft and other things which related atomic energy, defense, and railways transport, etc.

And remaining CPSEs are regarded as Non-Strategic CPSE.

2. Public Sector Bank(PSBs)

Which Banks Which come under the direct control of the central government or of other PSBs 51% or more than 51% of the capital share ownership called Public sector banks (PSBs).

3. State Level Public Enterprises (SLPEs)

Which companies come under the direct control of the state government or other SLPEs by 51% or more than 51% of the capital share ownership.

Concept Behind PSUs – Maharatnas, Navratnas, and Miniratnas.

Basically, Following – Maharatnas, Navratnas, and Miniratnas these PSUs classified under the Central public sector enterprises(CPSEs)

The concept Behind the PSUs companies to be classified into these three Maharatnas, Navratnas and Miniratnas are Company Status, financial performance, and growth.

Moreover, these statuses provide them increased autonomy over financial and legalistic matters to some extent and enable them to compete with other market players domestically as well as internationally, and moreover ribbon a prestigious title. These statuses moreover represent the resulting growth of a company.

Maharatna PSUs – Companies

The Maharatna is the highest status a visitor can get under this system. Hence, to qualify for the Maharatna status, the visitor has unrepealable parameters to fulfill, and only without that, it can be awarded as Maharatna PSU or Company.

First of all, It should be Navratna company. After that, it could become Maharatna company after promotion, if it is eligible. To learn more about Maharatna PSUs >>>

Navratna PSUs – Companies

The company Navratna is the second-highest status of a PSU. To be qualified for the navratna status has to fullfill follwing criteria:

First of all, It should be Miniratna Companies. Learn more about Navratna PSUs>>>

Miniratna PSUs – Companies

In PSUs categories, the government created another category called Miniratnas. Miniratnas can moreover enter into joint ventures, set subsidiary companies and overseas offices but with unrepealable conditions. In 2002, only were 41 government companies were awarded Miniratna status. Learn more about Miniratnas PSUs>>>

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