PSU Full Form: All You Need to Know About PSU: What is PSU?, What is PSU Full Form, and meaning of PSU, how PSU started, do you know, if your answer is no, then you have nothing to be sad about, because today in this post we are going to give you complete information about PSU.
PSU Full Form
The PSU full form is “Public Sector Undertaking“, PSUs are government-owned corporations in India, in which the majority of the company equity (51% or more) is owned by the central government or state government or partly by the central government and partly by the state government. Let us now go ahead, and provide you with a little more detail about it.
All public undertakings are audited by the Comptroller and Auditor General (CAG). He has the power to appoint auditors and direct them to follow the correct audit procedure for auditing the accounts of the PSUs.
Popular PSUs in India
Some of the popular PSUs in India are State Bank of India, Coal India Limited, Indian Oil Corporation Limited, Food Corporation of India, Bharat Heavy Electricals Limited, National Thermal Power Corporation, Power Grid Corporation of India, Bharat Petroleum Corporation Limited, Oil and Natural Gas Nigam Limited, Mahanagar Telephone Nigam Limited and many more.
What is PSU?
Government-owned public undertakings are created and operated by the government under its own banner to carry out commercial projects. These state-owned corporations are concerned about earning fewer profits and focus more on nation-building and improving the country’s economy.
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PSU is such a company, which comes under the jurisdiction of the government, and the government itself gives directions to this company, most of its equity is with the government. If we say in simple words, then there is a Major Shareholder Government in such a company.
For example, BHEL is a company in which the government is the Major Shareholder, due to which it is called a government company and it is also known as PSU. PSUs are formed by the government to undertake commercial projects under their own banner. These state-owned companies are not much concerned about making profits and focusing on the economy of the country.
Here, for your information, let us tell you that a company in which the government is not a Major Shareholder, then it cannot be called a government company. For this reason, it is called a private sector unit, and according to the rules of the Government of India, if the government has 51% or more of its shares in any company, then it is called a public sector unit.
Classification of PSUs (Public Sector Undertakings)
Public undertakings can be divided into three groups –
- Public Sector Enterprises (PSEs)
- Central Public Sector Enterprises (CPSEs)
- Public Sector Banks (PSBs)
Some of the popular PSUs in India are listed below
- Coal India Limited
- Food Corporation of India
- state Bank of India
- Indian Oil Corporation Limited
- National Thermal Power Corporation
- Power Grid Corporation of India
- Bharat Heavy Electricals Limited
- Oil and Natural Gas Corporation Limited
- Mahanagar Telephone Nigam Limited
- Bharat Petroleum Corporation Limited
There are two different classifications of ( PSUs ) Public Sector Undertakings –
- Central Public Sector Enterprises (CPSEs) are controlled by the Central Government.
- State Level Public Enterprises (SLPEs) are controlled by the State Governments.
Features of PSUs in Economics
The main features of public undertakings in economics are as follows:
Public Sector Undertakings are wholly-owned and controlled by the Government or any other public authority. For example, the central government owns the Reserve Bank of India. Similarly, the Delhi State Government is the owner of the Delhi Transport Corporation.
The governments of India not only own but also control the affairs of public undertakings in India.
The primary aim and objective of a Public Sector Undertaking (PSU) is to provide quality service to the public. In order to serve the people, it can also take a loss. For example, the Food Corporation of India provides food grains to the public at subsidized prices.
The government provides capital and money through an appropriation from its budget. The government may also provide loans from time to time with a view to improving the overall functioning of the PSUs.
Public Sector Undertakings (or PSUs) are accountable to the public at large. Their performance and results are very important to the public. The Comptroller and Auditor General of India conduct an annual audit of these undertakings. In addition, their annual reports are under discussion in the Parliament or the State Legislative Assembly.
Being the largest commercial enterprise in the country, PSUs provide a huge advantage to the government (their controlling authority) to intervene in the economy. Their intervention is either directly or indirectly to achieve the desired socio-economic objectives. PSUs play an important role in taking the national economy in the right direction.
They play an important role in the economic development of the nation. The public sector was given the responsibility of creating infrastructure for other sectors of the economy, focusing on the key and providing for the goods and services needed by the economy.
The Term Undertaking
The term public sector undertaking refers to a Government company, “Government company” as defined under section 2 (45) of the Companies Act, 2013, as any company in which the Central Government or a State Government Not less than fifty-one percent of the paid-up share capital. or Governments, or partly by the Central Government and partly by one or more State Governments, and includes a company which is a subsidiary of such Government company. The term does not mean a public company (where the shares are freely transferable and have a shareholder base of more than 200 people) although public sector enterprises are mostly public companies.
Public Sector Undertakings refer to the commercial undertakings of the government where user fees are charged for the services provided. Tariffs/fees can be market-based or subsidized. They are usually wholly owned and managed by the Government such as Railways, Posts, Defense Undertakings, Banks, etc.
Companies Act, 1956
Public Sector Enterprises on the other hand refer to those companies registered under the Companies Act, 1956, which are mainly owned and operated by the Government. are owned and managed by a Government-appointed Chairman and Managing Director. Government candidates represent the interests of the government on the boards of public sector enterprises. Public sector companies usually compete with private sector enterprises in the domestic and international markets.
Investment decisions of PSUs are passed by the respective boards and then approved and approved by the sanctioning ministry for which they are accountable (for example the Shipping Corporation of India is under the Department of Shipping in the Union Ministry of Surface Transport).
Note: This post is only for informational purposes. Maybe Some data is changed by time or wrong. In this case, We are not responsible. So For better Knowledge of the PSU. Please Visit the Government Official Websites.