What is the full form of PSU ?

PSU Full Form: Public Sector Undertakings

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The full form of PSU is public sector undertakings that refer to the organizations and companies that are backed by or managed by the Government. So any government-owned enterprise in India is called PSU or public sector undertaking as well as a public sector enterprise.

These PSUs are companies wholly owned or partially owned by the Government of India as well as one of the many state or territorial governments or both together in parts.

These public sector undertaking companies can be classified as central public sector undertakings that are wholly or partially owned by the Government of India and state-level public sector undertakings that are wholly or partially owned by the state government.

There were only 5 public sector undertakings in 1951 in India however today there are more than 350 public sector undertakings in India.

PSU full form
PSU full form

The employees who work in these public sector enterprises and their subsidiaries are called government employees. The company stocks of these companies are majorly owned by the government of India.

PSU history

After the independence of India in 1947, it was mainly based on agriculture and had a weak industrial base. At that time there were only 18 state-owned Indian ordinance factories.

These were established previously to reduce the dependency of the British Indian Army on imported arms.

The British government left the agriculture sector and production and gave industrialization to the private sector with commercial tea processing, jute mills Railways, electricity generation, Banks, steel mills, civil engineering funded, coal mines to the private individuals.

After the Independence of India, the national consensus was in the favour of rapid industrialization of the country and it was visible in the key to economic development by improving living standards and economic sovereignty etc.

The prime minister of India at that time Mr Jawaharlal Nehru launched the economic policy based on import substitution industrialisation and also advocated a mixed economy.

After that, the second fiver year planning of India and the industrial policy resolution of 1956 made the development of public sector enterprises or public sector undertaking companies. The prime consideration in setting up these PSUs was to rise the growth of core sectors of the Indian economy.

In 1969 the government led by Indira Gandhi nationalised fourteen of India’s private sector banks and after that six more in 1980.

However, after the 1991 Indian economic crisis, the government started to disinvest its ownership of many public sector undertaking companies to raise capital and to privatise companies that were facing slow to no financial performance and low abilities.

PSU Governance

Public sector companies that have comparative advantages are awarded additional financial autonomy. This gave these public sector undertakings greater autonomy to compete in the global market so it can support their drive to become global giants.

This first financial autonomy was given to the nine public sector undertakings as Nirvana status in 1997.

The government of India formed the higher Maharatna category for these PSUs in 2010 that raised a company’s investment ceiling from 1000 crore to 5000 crores.

In India, the public sector undertaking companies are categorised based on special non-financial objectives. These are under section 8 of the Companies Act, 2013.

Profitable PSU

Some of the top profit-making public sector undertakings are-

  • Indian oil corporation
  • ONGC Limited
  • NTPC Limited
  • Coal India Limited
  • Bharat Petroleum Corporation Limited
  • Power Grid Corporation of India Limited
  • Power Finance Corporation Limited
  • Bharat Sanchar Nigam
  • Hindustan petroleum corporation limited (HPCL)
  • Gail India etc.

PSU in loss

Some of the loss-making public sector undertakings are –

  • India post
  • Air India Limited
  • State trading corporation of India
  • Mahanagar Telephone Nigam limited
  • PEC limited
  • MSTC limited
  • Airline Allied services limited
  • Chennai Petroleum Corporation limited
  • Orrisa Mineral Development company limited


How many PSUs are in India?

As of January 2022, the Total no. of PSUs in India is 277. some of them are profitable and many of them are also making losses.

Some other famous full forms of PSU

PSU- Power Supply Unit (in Electronics and computer)

PSU – Pennsylvania State University (A very famous university)

PSU- Primary Sampling Unit (in Transportation)

Similar full forms

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