INTRODUCTION

 Through the Public Sector Undertakings

(PSUs)the basic of further rapid industrialisation has
been laid.
 Without the public sector India would not
have been among the front rankers in the world.
India is today big industry and technology.
 There has been a very welcome diversification of
the country’s industrial structure.
 They have also made a significant contribution
to the balanced economic development in the
 PSUs in
India
 A state owned enterprise in India is called Public
Sector Undertakings or a Public Sector Enterprise.
 The companies owned by the union government of
India/ one of the many state / territorial government/
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(CPSE), Public sector Bank(PSBs) and
State Level Public Enterprises(SLPEs).
 CPSEs are administered by the Ministry of Heavy
Industries and Public Enterprises.
 Different sectors in
Public Sector in
 Coal industryIndia Telecommunicatio
Oil and n industry
Petroleum Aviation industry
industry Service industry
Steel industry Agriculture
Thermal power industry
industry  Manufacturing
Jute industry industry
Banking industry Mining industry
Food industry Electricity industry
Insurance Engineering
 ROLE OF PUBLIC SECTOR

 Contribution to Capital Formation

 Development of Infrastructure
 Role of Export Earnings
 Contribution to Import substitution
 Share in National Income
 Share in Employment Generation
 Balanced Regional Development
 Contribution to Capital Formation
 Capital formation means increasing the stock of
real capital in a country.
The PSUs are playing a dominant role to
channelize savings into regular investment.
In first and second Five year plan 54% of total
investment was in Public Sector.
Third Five year plan increased 60%
 Seventh plan investment down 45.7%
However, last decades capital formation of public
sector has increased from just 46% to 61%
 Development of Infrastructure
 Infrastructure considered as the “Back Bone” of the
Indian economy.
 The economic development and infrastructure are positively
co-related.
 Infrastructure mainly refers to Power, Transport,
Communication, Irrigation, Steel, Cement and Fertilisers etc.
 After the pre independence period the government had
taken several initiative to make the process of
industrialisation technically and financially strong.
 The large industries are set up with proper capital
formation regarding the development of all type of
transport, power and effective resources mobilisation.
 Role Of Export
Earnings
 The Public Sector undertakings have been making
sizable contribution to the country’s export earnings
by exporting goods as well as services.
 Thereby earning substantial foreign exchange.
 The public sector has built up a reputation abroad in
selling plants, heavy equipment’s machine’s tool’s and
other industrial product’s.
 Bharath Heavy Electricals Ltd, HMT Ltd, Hindustan
Steel Ltd, State Trading corporations.
 Bharat Electronics Ltd, IOC, ONGC etc.
 Contribution to Import
Substitution
 The development process in our economy was
launched through the inward looking strategy of
Import Substitution.
 The public sector has made an immense contribution
to the process of substitution of indigenously produced
goods.
 Today many commodities starting from basic drugs to
highly advanced equipments are manufactured in the
public sector.
 Indian Oil Corporation and Oil and Natural Gas are
some of the leading enterprises, which are contributing
self-reliance on their respective fields.
 Share in National
 In Income
Indian mixed economic system, the growth process
has been accelerated by the investment in the public
sector.
 The contribution to public sector in the generation of
net domestic product has consistently been increasing.
 Public sector unit adds huge revenue through Excise
duty, Customs duty, Dividend, Profit and other Direct
taxes.
 Share in Employment
Generation
 Full employment is the most cherished goal of economic
policy of the government.
 Gov. Of India and state government are making
contribution to employment generation both directly
and indirectly.
 Indirect Employment generation is through public
investment in Anti- unemployment programme.
 Direct employment generation is through expansion
of its administration department and economic
enterprises.
 More than 17 lakh of people are employing in Indian
Railways.
 Balanced Regional Development
Public sector undertakings have located their
majority of plants in backward part of the
country.
These areas lacked basic industrial and civic
facilities like electricity, water supply, township
and manpower.
Public enterprises have developed these
facilities thereby bringing about complete
transformation is the socio-economic life of the
people in these regions.
 Conclusio
The public sectorn
enterprises in the Indian economy
are to play an important role. They account for over
22% of the country’s GDP around 6% of the total
employment in the organised sector, and over 20% of
direct and indirect tax collections.