PUBLIC SECTOR ENTERPRISES IN INDIA

Objectives of Public Sector enterprises Rapid economic growth and

industrialization Earn return on investment Promote redistribution of income and

wealth Create employments Assist in small scale development and

ancillary industry development Promote import substitution

Growth and performance of PSUs Industrial Policy Resolution of 1948-

arms , ammutations, atomic energy, railway transportation – monopoly of Central Govt.

Another six by state govt .- coal , iron, steel , aircraft , ship building , telephone, telegraph etc.

Growth of Public enterprises

Sr No

Plans Investment ( Rs Crore)

Total number of enterprises

1 1st plan 29 5

2 2nd plan 81 21

3 3rd plan 953 48

4 4 th plan 3902 85

5 5th plan 6237 122

6 6th plan 18,225 186

7 7th plan 42,811 221

8 8th plan 1, 18 , 492 237

9 9th plan 2,01,500 238

10 31st march 1999 2,73,700 235

Constraints

Set up not only for commercial purposes Low returns on investment Prevalent of sick units Could not bear market fluctuations .

The New Industrial Policy 1991- Priority Areas Infrastructure Oil exploration Technology development Strategic products

Industries reserved for PSU - 8 Defense equipments Atomic energy Coal and lignite Mineral Oils Mining of iron ore , maganese, chrome,

gypsum , sulphur,etc Mining of copper, lead, zinc etc. Atomic energy Railways

Public Sector Ratnas - Navratnas BHEL BPCL HPCL IPCL NTPC ONGC SAIL VSNL GAIL MTNL

Organisation of PSU

Ministry

Departmental undertakings a) Financed by treasury b) Subject to budgeting by govt. c) Permanent staff are civil servants d)It Is subordinate to ministry

Government Companies: a) 51% OR above is owned by the govt b) Directors are appointed by the govt c) Creatd under companies act d) Created by executive decision of the

govt without the approval of the parliament.

e) Funds obtained from both the parties. f) Its employees not civil servants .

Public Corporation: Statutory corporation a) State owned b) Created by special law c) Corporate Body d) Independently financed e) Not subjected to laws for govt

departments f) Not governed by govt rules and

regulations .

Govt control over PSUs

Parliamentary Impact

Direct impact

Indirect Impact

a) Direct impact Questions in parliament Annual Reports Approval of Budgets Inquiries by committees

b) Indirect impact Ministers and executives accountability Board membership Audit systems By appointing adhoc commissions

Nationalisation

Have control over strategic sectors Put an end to mismangement Ensure utilisation of resources Protect the interests of consumers Take necessary actions for the

development industries

Other Sectors

Private Sector Joint Sector Co-operative Sector a) Functional Co-operatives b) Multipurpose Co-operatives c) National Level Co-operative

federations.