PSU Full Form: Public Sector Undertaking is the full form of PSU. PSU is a corporation, company, or organization that is owned by the government where most of the work is handled by the Central or state government of India. PSUs are government-owned companies that are less concerned about making profits and more focused on nation-building and improving the economy of the country. PSUs operate in various sectors such as energy, manufacturing, infrastructure, banking, telecommunications, defense, and more.
The majority of equity shares are owned by the central or the state government.
History of Public Sector Undertaking
the British colonial government established various state-owned enterprises in sectors such as railways, postal services, telegraph, and mining Before India’s independence in 1947. These entities laid the foundation for the subsequent development of PSUs in independent India.
- In 1948 the Indian government under the tenure of Prime Minister Jawaharlal Nehru adopted the Industrial Policy Resolution which emphasized the role of the public sector in promoting industrial development and achieving self-sufficiency.
- In 1956 the Indian government introduced the concept of “Maharatna” and “Navratna” companies. Maharatna companies are the largest and most profitable PSUs while Navratna companies are identified as highly successful and capable of global expansion.
- During the tenure of Prime Minister Indira Gandhi in the 1970s, the government adopted a more socialist approach, nationalizing several private industries.
Objectives of Public Sector Undertaking
- PSUs are established to promote economic growth and development.
- They contribute to employment generation, infrastructure development, and overall industrial progress.
- PSUs play a crucial role in nation-building efforts. They contribute to the development of critical infrastructure, such as power plants, roads, railways, airports, and telecommunications networks.
- It aims to create sustainable employment and promote social welfare by offering stable and secure job prospects.
- They contribute to the growth of domestic industries and foster innovation within the country.
Classification of Public Sector Undertakings in India
In India, PSUs are classified into three parts.
- Central Public Sector Enterprises (CPSE/CPSU)
- Public sector banks (PSB)
- State-level public enterprises (SLPE/SLPU)
Top PSUs in India
- Oil and Natural Gas Corporation Limited (ONGC)
- Bharat Heavy Electricals Limited (BHEL)
- Steel Authority of India Limited (SAIL)
- National Thermal Power Corporation Limited (NTPC)
- Indian Oil Corporation Limited (IOCL)
- Hindustan Aeronautics Limited (HAL)
- Bharat Petroleum Corporation Limited (BPCL)
- Life Insurance Corporation of India (LIC)
- Power Grid Corporation of India Limited (POWERGRID)
- Coal India Limited (CIL)
Role of PSU in the Indian Economy
- Generation of income
- Capital Formation
- Employment
- Infrastructure Development
- Strong Industrial Base
- Export Promotion & Import Substitution
- Contribution to Central Exchequer
- Checking the Concentration of Income and Wealth
- Removal of Regional Disparities
FAQs on PSU Full Form
Q. What does PSU stand for?
Ans: PSU stands for Public Sector Undertaking.
Q. What is the oldest PSU in India?
Ans: The oldest PSU in India is Bharat Heavy Electricals Limited (BHEL), established in 1964.
Q. Are all PSUs wholly owned by the Indian government?
Ans: No, not all PSUs are wholly owned by the Indian government. Some PSUs have partial private ownership or are operated in joint ventures with private entities.
Q. What does ONGC stand for?
Ans: ONGC stands for Oil and Natural Gas Corporation Limited.
Q. When was ONGC Established?
Ans: ONGC was established on June 14, 1956.