Public sector undertakings in India
A state-owned enterprise in India is called a Public Sector Undertaking (PSU) or a Public Sector Enterprise. These companies are wholely owned by the Government of India or one of the many state or territorial governments or both together in parts. The officers working in these entities are gazetted officers. The company stock is majority-owned by the government in a PSU. PSUs are classified as central public sector enterprises (CPSUs, CPSEs) or state level public enterprises (SLPEs). In 1951, there were just 5 enterprises in the public sector in India, but in March 2019 this had increased to 348. These enterprises represented a total investment of about ₹16.41 lakh crore as on 31 March 2019. The total paid up capital as on 31 March 2019 stood at about ₹2.76 lakh crore. CPSEs have been earned revenue of about ₹25.43 lakh crore during the financial year 2018–19. They are administered by the Ministry of Heavy Industries and Public Enterprises.
When India achieved independence in 1947, it was primarily an agricultural country with a weak industrial base. There were only eighteen Indian Ordnance Factories in the country which British had established for their own economic interest and rule the subcontinent with brute force. The national consensus was in favour of rapid industrialisation of the economy which was seen as the key to economic development, improving living standards and economic sovereignty. Building upon the Bombay Plan, which noted the requirement of government intervention and regulation, the first Industrial Policy Resolution announced in 1948 laid down broad contours of the strategy of industrial development. Subsequently, the Planning Commission was formed by a cabinet resolution in March 1950 and the Industrial (Development and Regulation) Act was enacted in 1951 with the objective of empowering the government to take necessary steps to regulate industrial development.
Prime Minister Jawaharlal Nehru promoted an economic policy based on import substitution industrialisation and advocated a mixed economy. He believed that the establishment of basic and heavy industry was fundamental to the development and modernisation of the Indian economy. India's second five year plan (1956–60) and the Industrial Policy Resolution of 1956 emphasised the development of public sector enterprises to meet Nehru's national industrialisation policy. His vision was carried forward by Dr. V. Krishnamurthy known as the "Father of Public sector undertakings in India". Indian statistician Prasanta Chandra Mahalanobis was instrumental to its formulation, which was subsequently termed the Feldman–Mahalanobis model.
The major consideration for the setting up of 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. A large number of "sick units" were taken over from the private sector. Additionally, Indira Gandhi's government nationalised fourteen of India's largest private banks in 1969, and an additional six in 1980. This government-led industrial policy, with corresponding restrictions on private enterprise, was the dominant pattern of Indian economic development until the 1991 Indian economic crisis. After the crisis, the government began dis-investing its ownership of several PSUs to raise capital and privatise companies facing poor financial performance and low efficiency.
Certain public sector undertakings have been awarded additional financial autonomy. These companies are "public sector companies that have comparative advantages", giving them greater autonomy to compete in the global market so as to "support [them] in their drive to become global giants". Financial autonomy was initially awarded to nine PSUs as Navratna status in 1997. Originally, the term Navaratna meant a talisman composed of nine precious gems. Later, this term was adopted in the courts of Gupta emperor Vikramaditya and Mughal emperor Akbar, as the collective name for nine extraordinary courtiers at their respective courts.
In 2010, the Government established the higher Maharatna category, which raises a company's investment ceiling from ₹1,000 crore to ₹5,000 crore. The Maharatna firms can now decide on investments of up to 15 per cent of their net worth in a project while the Navaratna companies could invest up to ₹1,000 crore without explicit government approval. Two categories of Miniratnas afford less extensive financial autonomy.
Guidelines for awarding Ratna status are as follows:
|Maharatna||Navratna||Miniratna Category-I||Miniratna Category-II|
|Eligibility||Three years with an average annual net profit of over ₹2,500 crore, OR
Average annual Net worth of ₹10,000 crore for 3 years, OR Average annual Turnover of ₹20,000 crore for 3 years (against Rs 25,000 crore prescribed earlier)
|A score of 60 (out of 100), based on six parameters which include net profit, net worth, total manpower cost, total cost of production, cost of services, PBDIT (Profit Before Depreciation, Interest and Taxes), capital employed, etc., AND
A company must first be a Miniratna and have 4 independent directors on its board before it can be made a Navratna.
|Have made profits continuously for the last three years or earned a net profit of ₹30 crore or more in one of the three years||Have made profits continuously for the last three years and should have a positive net worth.|
|Benefits for investment||₹1,000 crore – ₹5,000 crore, or free to decide on investments up to 15% of their net worth in a project||up to ₹1,000 crore or 15% of their net worth on a single project or 30% of their net worth in the whole year (not exceeding ₹1,000 crores).||up to ₹500 crore or equal to their net worth, whichever is lower.||up to ₹300 crore or up to 50% of their net worth, whichever is lower.|
PSUs in India are also categorised based on their special non-financial objectives and are registered under Section 8 of Companies Act, 2013 (erstwhile Section 25 of Companies Act, 1956).
Top Profit Making Public Sector Undertakings
|CPSE Name||Net Profit (In ₹ crore)|
|Indian Oil Corporation Ltd.||14569|
|Coal India Ltd.|
|Power Grid Corporation of India Ltd.||9,939|
|Bharat Petroleum Corporation Ltd.||7,132|
|Power Finance Corporation Ltd.||6,953|
|Bharat Sanchar Nigam Ltd.||6,040|
|Hindustan Petroleum Corporation Ltd.||6,029|
|Gail (India) Ltd.||6,029|
Top Loss Making CPSEs
|CPSE Name||Net Loss (In ₹ crore)|
|Air India Limited||15,475|
|Mahanagar Telephone Nigam Ltd.||3,390|
|State Trading Corporation of India||881|
|Orissa Mineral Development Company Ltd.||452|
|National Textile Corporation Ltd.||315|
|Airline Allied Services Ltd.||297|
|Chennai Petroleum Corporation Ltd.||213|
List of public sector undertakings
List of Maharatnas
- National Thermal Power Corporation (NTPC)
- Oil and Natural Gas Corporation (ONGC)
- Steel Authority of India Limited (SAIL)
- Bharat Heavy Electricals Limited (BHEL)
- Indian Oil Corporation Limited (IOCL)
- Hindustan Petroleum Corporation Limited (HPCL)
- Coal India Limited (CIL)
- Gas Authority of India Limited (GAIL)
- Bharat Petroleum Corporation Limited (BPCL)
- Power Grid Corporation of India (POWERGRID)
List of Navratnas
- Bharat Electronics Limited (BEL)
- Container Corporation of India (CONCOR)
- Engineers India Limited (EIL)
- Hindustan Aeronautics Limited (HAL)
- Mahanagar Telephone Nigam Limited (MTNL)
- National Aluminium Company (NALCO)
- National Buildings Construction Corporation (NBCC)
- National Mineral Development Corporation (NMDC)
- NLC India Limited (NLCIL)
- Oil India Limited (OIL)
- Power Finance Corporation (PFC)
- Rashtriya Ispat Nigam Limited (RINL)
- Rural Electrification Corporation (REC)
- Shipping Corporation of India (SCI)
List of Miniratna-II
- Artificial Limbs Manufacturing Corporation of India
- Bharat Pumps & Compressors (BPC)
- Broadcast Engineering Consultants India
- Central Mine Planning and Design Institute
- Central Railside Warehouse Company
- Engineering Projects (India) Ltd. (EPI)
- FCI Aravali Gypsum and Minerals (India) Limited
- Ferro Scrap Nigam Limited
- HMT Limited
- Indian Medicines & Pharmaceuticals Corporation Limited
- ITI Limited
- National Film Development Corporation of India (NFDC)
- PEC Ltd.
- Rajasthan Electronics & Instruments Limited
- Ministry of new and renewable energy (MNRE) and Solar Energy corporation of India Ltd (SECI)
List of Miniratna-I
- Airports Authority of India (AAI)
- Antrix Corporation
- Balmer Lawrie (BL)
- Bharat Coking Coal Limited (BCCL)
- Bharat Dynamics Limited (BDL)
- Bharat Earth Movers Limited (BEML)
- Bharat Sanchar Nigam Limited (BSNL)
- Bridge and Roof
- Central Warehousing Corporation
- Central Coalfields Limited
- Chennai Petroleum Corporation (CPCL)
- Cochin Shipyard (CSL)
- Cotton Corporation of India Limited (CCIL)
- Dredging Corporation of India (DCI)
- EdCIL (India) Limited (EdCIL)
- Kamarajar Port
- Garden Reach Shipbuilders & Engineers (GRSE)
- Goa Shipyard (GSL)
- Hindustan Copper (HCL)
- HLL Lifecare
- Hindustan Newsprint
- Hindustan Paper
- Housing and Urban Development Corporation
- India Tourism Development Corporation (ITDC)
- India Trade Promotion Organisation (ITPO)
- Indian Rare Earths (IREL)
- Indian Railway Catering and Tourism Corporation (IRCTC)
- Indian Renewable Energy Development Agency
- Ircon International
- Kudremukh Iron Ore Company
- Mazagon Dock Limited
- Mahanadi Coalfields (MCL)
- Mangalore Refinery and Petrochemicals Limited (MRPL)
- Mishra Dhatu Nigam
- MMTC Ltd.
- MSTC Limited
- National Fertilizers (NFL)
- National Small Industries Corporation Limited
- National Seeds Corporation (NSC)
- NHPC Limited
- Northern Coalfields (NCL)
- North Eastern Electric Power Corporation Limited (NEEPCL)
- Numaligarh Refinery
- ONGC Videsh
- Pawan Hans
- Projects and Development India Limited (PDIL)
- RailTel Corporation of India
- Rail Vikas Nigam Limited
- Rashtriya Chemicals & Fertilizers (RCF)
- Ramagundam Fertilizers and Chemicals Ltd.
- SJVN Ltd.
- Security Printing and Minting Corporation of India
- South Eastern Coalfields (SECL)
- State Trading Corporation of India
- Telecommunications Consultants India (TCIL)
- THDC India Limited
- Western Coalfields (WCL)
- Water and Power Consultancy Services
- Mineral Exploration Corporation Limited
Public Sector Banks
Nationalised Full Service Scheduled Banks (Government Shareholding %, as of 1 April 2020)
- State Bank of India (61.00%)
- Bank of Baroda (63.74%)
- Union Bank of India (67.43%)
- Punjab National Bank (85.58%)
- Canara Bank (72.55%)
- Punjab & Sind Bank (79.62%)
- Indian Bank (81.73%)
- Bank of Maharashtra (87.01%)
- Bank of India (87.0535%)
- Central Bank of India (88.02%)
- Indian Overseas Bank (95%)
- UCO Bank (93.29%)
Payments Bank (PB)
- India Post Payments Bank (IPPB) (100% owned by India Post)
- National Securities Depository Limited Post Payments Bank (NSDL-PB) (100% owned by NSDL)
- Public sector undertakings in Kerala
- Public sector undertakings in Tamil Nadu
- Disinvestment of Public Sector Units in India
- Indian company law
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- Ghose, Shankar. Jawaharlal Nehru. Allied Publishers. p. 243. ISBN 978-8170233695.
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- Original govt. announcement about the Navratnas 1997 Archived 9 February 2012 at the Wayback Machine
- "Maharatnas, Navratnas: India's best PSUs!". Rediff.
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- "Home | Department of Public Enterprises | MoHI&PE | GoI".