5 CPSUs on the eve of the first plan 249 CPSEs as on 31st March 2010 CPSEs are major players in their respective sectors Eg. NTPC, ONGC, CIL

In 2008-09 CPSEs contributed Rs 151,543 crore in the form of excise duty, customs duty, corporate tax, interest on central government loans, dividend and other duties and taxes Employed 14.91 lakh people (excluding casual workers) in 2008-09 The share of gross value addition in CPSEs in GDP stood at 6.3 % in 2009-10

Three forms of PSUs Departmental Undertakings Government Companies Public Corporations

Departmental Undertakings Most prevalent before independence Many exist till today Eg. Railways, post and telegraph, defence Features Financed by appropriations from the govt treasury Their receipts are also credited into the treasury Their financial operations subject to the budget, accounting and audit controls similar to govt activities Their permanent employees are civil servants They do not have a separate entity of their own; form a part of the govt

Some functions of internal management Strike a balance between social motive and efficient financial management of the enterprise. Social motive cannot be an excuse for mismanaging the funds and thereby making losses Personnel management is very important. Training and education of the employees Where the company is in competition with other firms it should follow an aggressive market policy Lay out clear-cut statement of objectives and obligations of the undertaking Lay out a corporate plan Link the plan with the national plan Appropriate inventory management Choice of technology

Contribution of PSUs Assess in terms of Contribution to GDP Employment Strategic output Led to rapid industrialisation Redistribution of wealth Welfare programmes Contribution to the govt treasury Created opportunities for employment: representation of SCs and STs in the management Promoting balanced regional development Saving and earning foreign exchange

BRPSE Board for Reconstruction of Public Sector Enterprises Estd. 2004 An advisory body to advise the govt on the strategies, measures and schemes for strengthening, modernizing, reviving and restructuring of public sector enterprises.

Liberalisation Sectors that were exclusive preserve of the PSEs were opened to the private sector CSPEs therefore are faced with competition from both the domestic private sector companies and the large MNCs The monopoly market conditions have given way to oligopoly and competitive market conditions and there is intense competition in the market The market shares of CSPSEs in industries such as telecom, oil refinery, coal, power, steel and transportation has declined over the years

Disinvestment Began in 1991-92 The current policy on disinvestment was approved in 2009 The objective of disinvestment policy is to develop people’s ownership of CPSEs and to share in the their wealth and prosperity while ensuring that Govt equity does not fall belwo 51% and govt retains the management control

Revival of sick PSUs Number of sick PSUs 2003: 111 2010: 45 Sick CPSEs brought under the purview of Sick Industrial Companies (Special Provision) Act, 1985 BRPSE set up in 2004