Public Sector Undertakings in India

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Public Sector Undertakings (PSU) in India are government-owned entities in which atleast 51% of stake is under the ownership of the Government of India or state governments. Depending on the level of government ownership, they can be broadly categorised as Central PSUs or State PSUs.^{[citation needed]} These entities perform commercial functions onbehalf of the government.^[1][2] PSUs are officially classified into two categories, which are Central Public Sector Undertakings (CPSUs) owned by the central government or other CPSUs and State Public Sector Undertakings (SPSUs) owned by state governments. CPSU and SPSU is further classified into Strategic Sector and Non-Strategic Sector. Depending on their financial performance and progress, CPSUs are granted the status of Maharatna, Navaratna, and Miniratna (Category I and II).

Following India's independence in 1947, the limited pre-existing industries were insufficient for sustainable economic growth. The Industrial Policy Resolution of 1956, adopted during the Second Five-Year Plan, laid the framework for PSUs. The government initially prioritized strategic sectors, such as communication, irrigation, chemicals, and heavy industries, followed by the nationalisation of corporations. PSUs subsequently expanded into consumer goods production and service areas like contracting, consulting, and transportation. Their goals include increasing exports, reducing imports, fostering infrastructure development, driving economic growth, and generating job opportunities. Each PSU has its own recruitment rules and employment in PSUs is highly sought after in India due to high pay and its job security, with most preferring candidates with a GATE score.^[3]

In 1951, there were five PSUs under the ownership of the government. By March 2021, the number of such government entities had increased to 365.^[4] These government entities represented a total investment of about ₹16,410,000,000,000 as of 31 March 2019. Their total paid-up capital as of 31 March 2019 stood at about ₹200.76 lakh crore. CPSEs have earned a revenue of about ₹24,430,000,000,000 + ₹1,000,000,000,000 during the financial year 2018–19.^[4]