PSU
Description
PSU abbreviated as Public Sector Undertaking is a company owned
by the union government of India, or one of
the many state or territorial governments,
or both. A characteristic feature of such type of organization is that the stock needs
to be majority-owned by the government to be a PSU. PSUs in India are
classified Maharatna, Navratna and Miniratna. In 1952 there were only a few of
say five PSUs in India, but this number was suddenly increased to 246 by March
1992.
ยท
Maharatna PSUs: Presently SAIL, ONGC, NTPC, CIL, IOCL, BHEL and GAIL have been given
the title of Maharatna. This status is given to the PSU which lies in the top
public sector enterprises where the companies have the authority to carry out
foreign investments of up to Rs. 5,000 crores without asking the government for
any approval. But be conferred with the title of Maharatna net profit of over
Rs. 5,000 crores annually needs to be earned and also to achieve a turnover of
Rs. 25,000 crores.
Navratna
PSUs: The status of Navratna is generally given to that company
which qualifies to obtain 60 marks out of 100. The marking is generally based
on six parameters which include total manpower ,net profit to net worth, cost
to total cost of production Profit before depreciation, interest and taxes to
capital employed, Profit before depreciation, interest and taxes to capital
employed to turnover, Earning per Share and performance of that company amongst
the other PSUs. In the initial phases it is a Miniratna having four directors
which act independently in the council. They have the freedom to enter joint
ventures, form float subsidiaries and alliances from abroad. The status enhances
the financial and operational autonomy and empowers to invest up to
Rs. 1000 crores or about 15% of their net worth on a single project without
seeking approval from the government.