Service Areas

Public Sector Undertaking (PSU)

Public Sector Undertaking (PSU) in India play a vital role in the growth and development of the economy. Since the ‘liberalisation’ of the economy, the environment of PSUs has undergone substantial change. Given the stated objectives of government to divest and privatise, entry of private firms into markets earlier reserved for Public Sector, many PSUs have responded to these changes in some manner. Currently the government is pursuing disinvestment, which is driven more by budgetary considerations. The Government is adamant upon improving the task orientation and performance of PSUs.

Government has established a Department for Disinvestment (DOD) to lay down a systematic policy approach to disinvestment and privatisation and to give a fresh impetus to this programme.

Government has already disinvested its stake in nine PSUs, namely, Modern Food Industries Limited (MFIL), Bharat Aluminium Company Limited (BALCO), Hindustan Teleprinter Limited (HTL), Computer Maintenance Corporation Limited (CMC), Hindustan Zinc Limited (HZL), Videsh Sanchar Nigam Limited (VSNL), Indo Burma Petroleum Limited (IBP), Indian Petrochemicals Corporation Limited (IPCL) and Paradeep Phosphates Limited (PPL). In addition to these cases, Government disinvested its stake in two small PSUs, namely Lagan Jute Manufacturing Company Limited (LJMC) and Jessop & Company Limited (JCL) besides 19 properties of Indian Tourism Development Corporation (ITDC) and three hotel properties of Hotel Corporation of India (HCI). The Government has now decided that privatisation was to be considered on a case by case basis. Generally, profit-making PSUs would not be privatized. While every effort is being made to modernize and restructure sick PSUs and revive sick industry, chronically loss-making undertakings are either being sold-off, or closed after all the workers had got their legitimate dues and compensation.