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 owned by the union government of India, or one of the many state or territorial governments, or both. The company stock needs to be majority-owned by the government to be a PSU. PSUs may be classified as Central Public Sector Enterprises (CPSEs), public sector banks (PSBs) or State Level Public Enterprises (SLPEs).

CPSEs are companies in which the direct holding of the Central Government or other CPSEs is 51% or more. They are administered by the Ministry of Heavy Industries and Public Enterprises.

History

Further information: Economic history of India

When India achieved independence in 1947, India was primarily an agricultural country with a weak industrial base. 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.[1] 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 constituted 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.[2] Prime Minister Jawaharlal Nehru promoted an economic policy based on import substitution industrialisation and advocated a mixed economy.[3] 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. Indian statistician Prasanta Chandra Mahalanobis was instrumental to its formulation, which was subsequently termed the Feldman–Mahalanobis model.[4][5]

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.[2] After the crisis, the government began disinvesting its ownership of several PSUs to raise capital and privatise companies facing poor financial performance and low efficiency.[6][7]

Governance

Various PSUs 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".[8] Financial autonomy was initially awarded to nine PSUs as Navratna status in 1997.[9] 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 Rs. 1,000 crore to Rs. 5,000 crore.[10] 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 Rs 1,000 crore without explicit government approval. Two categories of "Miniratnas" afford less extensive financial autonomy.

Guidelines for awarding ratna[11] status are as follow:

Maharatna Navratna Miniratna Category-I Miniratna Category-II
Eligibility Three years with an average annual net profit of over Rs. 2500 crore, OR

Average annual Net worth of Rs. 10,000 crore for 3 years, OR Average annual Turnover of Rs. 20,000 crore for 3 years

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 Rs. 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 Rs. 1,000 crore - Rs. 5,000 crore, or free to decide on investments up to 15% of their net worth in a project up to Rs. 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 Rs. 1,000 crores). up to Rs. 500 crore or equal to their net worth, whichever is lower. up to Rs. 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).

List of Public Sector Undertakings

As on 30 September 2015 there are 7 Maharatnas, 17 Navratnas and 73 Miniratnas.[12] There are nearly 300 CPSEs in total.[13]

List of Maharatna

  1. National Thermal Power Corporation (NTPC)
  2. Oil and Natural Gas Corporation (ONGC)
  3. Steel Authority of India (SAIL)
  4. Bharat Heavy Electricals Ltd. (BHEL)
  5. Indian Oil Corporation Limited(IOCL)
  6. Coal India Limited(COL)
  7. [Gas Authority Of India Limited]](GAIL)

List of Navratna

  1. Bharat Electronics
  2. Bharat Petroleum (BPCL)
  3. Container Corporation of India (CONCOR)
  4. Engineers India
  5. Hindustan Aeronautics
  6. Hindustan Petroleum (HPCL)
  7. Mahanagar Telephone Nigam (MTNL)
  8. National Aluminium Company (NALCO)
  9. National Buildings Construction Corporation (NBCC)
  10. National Mineral Development Corporation (NMDC)
  11. Neyveli Lignite Corporation
  12. Oil India
  13. Power Finance Corporation
  14. Power Grid Corporation of India
  15. Rashtriya Ispat Nigam (RINL)
  16. Rural Electrification Corporation
  17. Shipping Corporation of India

List of Miniratna-I

  1. Airports Authority of India
  2. Antrix Corporation
  3. Balmer Lawrie
  4. Bharat Coking Coal
  5. Bharat Dynamics
  6. Bharat Earth Movers
  7. Bharat Sanchar Nigam (BSNL)
  8. Bridge and Roof
  9. Central Warehousing Corporation
  10. Central Coalfields
  11. Chennai Petroleum Corporation
  12. Cochin Shipyard
  13. Dredging Corporation of India
  14. Kamarajar Port
  15. Garden Reach Shipbuilders & Engineers
  16. Goa Shipyard
  17. Hindustan Copper
  18. HLL Lifecare
  19. Hindustan Newsprint
  20. Hindustan Paper
  21. Housing and Urban Development Corporation
  22. HSCC
  23. India Tourism Development Corporation
  24. India Trade Promotion Organisation
  25. Indian Rare Earths
  26. Indian Railway Catering and Tourism Corporation
  27. Indian Renewable Energy Development Agency
  28. Ircon International
  29. Kudremukh Iron Ore Company
  30. Mazagaon Dock Limited
  31. Mahanadi Coalfields
  32. MOIL
  33. Mangalore Refinery and Petrochemicals Limited
  34. Mishra Dhatu Nigam
  35. MMTC Ltd
  36. MSTC Ltd
  37. National Fertilizers
  38. National Seeds Corporation
  39. NHPC Limited
  40. Northern Coalfields
  41. North Eastern Electric Power Corporation Limited
  42. Numaligarh Refinery
  43. ONGC Videsh
  44. Pawan Hans
  45. Projects and Development India Limited
  46. RailTel Corporation of India
  47. Rail Vikas Nigam Limited
  48. Rashtriya Chemicals & Fertilizers
  49. RITES
  50. SJVN Ltd.
  51. Security Printing and Minting Corporation of India
  52. South Eastern Coalfields
  53. State Trading Corporation of India
  54. Telecommunications Consultants India
  55. THDC Ltd
  56. Western Coalfields
  57. Water and Power Consultancy Services

List of Miniratna-II

  1. Bharat Pumps & Compressors
  2. Broadcast Engineering Consultants India
  3. Central Mine Planning and Design Institute
  4. Central Railside Warehouse Company
  5. Educational Consultants India
  6. Engineering Projects
  7. FCI Aravali Gypsum and Minerals (India) Limited
  8. Ferro Scrap Nigam Ltd
  9. HMT (International) Ltd
  10. Indian Medicines & Pharmaceuticals Corporation Limited
  11. MECON
  12. Mineral Exploration Corporation Ltd
  13. National Film Development Corporation of India
  14. National Small Industries Corporation
  15. PEC Ltd
  16. Rajasthan Electronics & Instruments Ltd

See also

References

  1. ↑ "Chapter 1, Industrial Policy Handbook" (PDF). Industrial Policy Handbook. Office of the Economic Adviser, Ministry of Commerce and Industry. p. 2. Retrieved 17 September 2015.
  2. 1 2 Jadhav, Narendra. "Industrial Policy since 1956" (PDF). Dr. Narendra Jadhav. Retrieved 17 September 2015.
  3. ↑ Ghose, Shankar. Jawaharlal Nehru. Allied Publishers. p. 243. ISBN 978-8170233695.
  4. ↑ Ahluwalia, Isher J. (1993). Productivity and Growth in Indian Manufacturing, part of Recent Developments in Indian Economy: With Special Reference to Structural Reforms, Part 2. New Delhi: Academic Foundation. p. 25. ISBN 9788171880942.
  5. ↑ Baldev Raj Nayar, Globalization And Nationalism: The Changing Balance Of India's Economic Policy, 1950–2000 (New Delhi: Sage, 2001)
  6. ↑ "Disinvestments-A Historical Perspective". Bombay Stock Exchange. Retrieved 19 September 2015.
  7. ↑ Sankar, T.L., Mishra, R.K., Lateef Syed Mohammed, A. (1994). "Divestments in Public Enterprises: The Indian Experience". International Journal of Public Sector Management. 7 (2): 69–88. doi:10.1108/09513559410055242.
  8. ↑ Original govt. announcement about the Navratnas 1997
  9. ↑ Rediff News 26.08.2010
  10. ↑ "Maharatna status for mega PSUs gets nod". The Times of India. 25 December 2009. Retrieved 29 December 2009.
  11. ↑ "bsepsu.com". www.bsepsu.com. Retrieved 2016-07-25.
  12. ↑ http://dpe.nic.in/publications/list_of_maharatna_navratna-and_miniratna List of Maharatnas, Navratnas, and Miniratnas
  13. ↑ http://www.bsepsu.com/list-cpse.asp List of CPSEs - BSE
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