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Explain Memorandum of Understanding between government

and PSU?

Presented by

Vikas R. Waghmare 57

Under the guidance of prof. Ghanachari

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A Public Sector Undertaking is a corporation in the public sector in India, where management control of the company rests

with the Government; it can be Central Government or the State

Governments

MOU - Memorandum of Understanding

Meaning- A binding contract typically must contain mutual consideration²legally enforceable obligations of the parties and its formationmust take place free of the so-called real defenses to contractformation (fraud, duress, lack of age or mental capacity, etc).

Public Sector Undertaking (PSU):The term is used to refer to companies in which the government(either the Union Government or State governments, or both)

owned a majority (51% or more) of the company equity.

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MO U between Government and PSUs

M emorandum of Understanding ( M oU) is a mutually negotiatedagreement between the management of PSUs and thegovernment for setting annual performance targets for PSUs.

M oU is meant to measure the Performance of M anagement of PSU at the end of the year in an objective and transparentmanner.

The strengthening of existing system of monitoring PSUs throughM

oU is an important element of the present policy of theGovernment.

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D uring FY01-FY04, PSUs were disinvested mainly throughstrategic sale and other related transactions, however post FY04,

no strategic sales were carried out by the PSUs.D uring FY04, the actual receipts of disinvestments rose by

364.38% as compared with the previous year.

The total receipts in FY04 stood at Rs 155.47 bn, ahead of thebudgeted mark of Rs 145 bn. This increase in receipt was majorlydue to disinvestments made through sale of minority shareholdingin the PSUs.

The total receipts of all actual disinvestments from FY01 toFY10 were Rs 392 bn, 55% of which came from sale of minorityshareholding in central PSUs and 16% from sale of residualshareholding in disinvested central PSUs. D uring FY09, there

has been no disinvestment transaction.

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L ist of PSUsMaharatna PSUsIndian O il Corporation Limited

NTPC LimitedO il & Natural Gas Corporation LimitedSteel A uthority of India LimitedNavratna PSUs :Bharat Electronics LimitedBharat Heavy Electricals LimitedBharat Petroleum Corporation LimitedCoal India LimitedG A IL (India) Limited

Hindustan A eronautics LimitedHindustan Petroleum Corporation LimitedM ahanagar Telephone Nigam LimitedNational A luminium Company LimitedNM D C LimitedO il India Limited

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THA NK YOU