Assignment on psu

Public Sector Undertakings

Assignment - 5


Date of Submission:12 September,2015

Submitted by:Sonali

Class:BBA

Roll No: BBA/13/913

Email:[email protected]

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Abstract

This assignment is made on the Public Sector Undertakings with a brief introduction and meaning of PSU.

Including the role of financial management in PSU and role of financial advisor so that a conclusion is taken

out, a list of PSUs in India is mentioned in this assignment.

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Table of Contents

1 Introduction.....................................................................................................................................................4

2 What is PSU mean for?...................................................................................................................................4

3 Challenges faced by Indian banking industry.................................................................................................4

4 Disinvestment..................................................................................................................................................9

5 Financial Management in PSUs....................................................................................................................12

6 Role of a financial adviser in a public sector undertaking............................................................................14

7 List of Public Sector Undertakings...............................................................................................................15

8 GATE 2015 PSU Jobs Vacancies Opening...................................................................................................18

9 Conclusion.....................................................................................................................................................19

10 Bibliography..................................................................................................................................................20

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1 Introduction

Public sector reforms occupy a vital place in the process of second-generation reforms. Public sector reforms are

generally considered synonymous with reforms in the central public enterprises. The fact that State PSUs are as

important as the central public enterprises in terms of investment, manpower and efficiency is sometimes lost

sight of. The financial performance of these enterprises has a direct bearing on the health of State finances that

are not in a good shape at present. There has been no comprehensive study on the State PSUs during the recent

times.

2 What is PSU mean for?

In India, a government owned company and their subsidiary companies is termed as a Public Sector

Undertaking (PSU) like Air India Limited, Bharat Heavy Electricals Limited, Coal India Limited, Food

Corporation of India, Hindustan Aeronautics Limited, India Trade Promotion Limited, National Thermal Power

Corporation, etc.

PSU of India is used to refer to companies in which the government (either the federal Union Central

Government or the many state or territorial governments, or both) own a majority (51 percent or more) of the

company equity.

3 Challenges faced by Indian banking industry

Developing countries like India, still has a huge number of people who do not have access to banking services

due to scattered and fragmented locations. But if we talk about those people who are availing banking services,

their expectations are raising as the level of services are increasing due to the emergence of Information

Technology and competition. Since, foreign banks are playing in Indian market, the number of services offered

has increased and banks have laid emphasis on meeting the customer expectations. Now, the existing situation

has created various challenges and opportunity for Indian Commercial Banks. In order to encounter the general

scenario of banking industry we need to understand the challenges and opportunities lying with banking

industry of India.

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Rural Market

Banking in India is generally fairly mature in terms of supply, product range and reach, even though reach in

rural India still remains a challenge for the private sector and foreign banks. In terms of quality of assets and

capital adequacy, Indian banks are considered to have clean, strong and transparent balance sheets relative to

other banks in comparable economies in its region.

Consequently, we have seen some examples of inorganic growth strategy adopted by some nationalized and

private sector banks to face upcoming challenges in banking industry of India.

For example recently, ICICI Bank Ltd. merged the Bank of Rajasthan Ltd. in order to increase its reach in rural

market and market share significantly. State Bank of India (SBI), the largest public sector bank in India has also

adopted the same strategy to retain its position. It is in the process of acquiring its associates. Recently, SBI has

merged State Bank of Indore in 2010.

Management of Risks

The growing competition increases the competitiveness among banks. But, existing global banking scenario is

seriously posing threats for Indian banking industry. We have already witnessed the bankruptcy of some foreign

banks.

According to Shrieves (1992), there is a positive association between changes in risk and capital.

Research studied the large sample of banks and results reveal that regulation was partially effective during the

period covered. Moreover, it was concluded that changes in bank capital over the period studied was risk-based.

Wolgast, (2001) studied the Merger and acquisition activity among financial firms. The author focused bank

supervisors in context with success of mergers, risk management, financial system stability and market liquidity.

The study concluded that large institutions are able to maintain a superior level of risk management . Al-Tamimi

and Al-Mazrooei (2007) examined the risk management practices and techniques in dealing with different types

of risk. Moreover, they compared risk management practices between the two sets of banks. The study found the

three most important types of risk i.e. commercial banks foreign exchange risk, followed by credit risk, and

operating risk.

Sensarma and Jayadev (2009) used selected accounting ratios as risk management variables and attempted to

gauge the overall risk management capability of banks. They used multivariate statistical techniques to

summarize these accounting ratios. Moreover, the paper also analyzed the impact of these risk management

scores on stock returns through regression analysis.

Researchers found that Indian banks' risk management capabilities have been improving over time. Returns on

the banks' stocks appeared to be sensitive to risk management capability of banks. The study suggest that banks

want to enhance shareholder wealth will have to focus on successfully managing various risks.

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Growth of Banking

Zhao, Casu and Ferrari (2008) used a balanced panel data set covering the period of 1992-2004 and employing a

Data Envelopment Analysis (DEA)-based Malmquist Total Factor Productivity (TFP) index. The empirical

study indicated that, after an initial adjustment phase, the Indian banking industry experienced sustained

productivity growth, which was driven mainly by technological progress. Banks' ownership structure does not

seem to matter as much as increased competition in TFP growth. Foreign banks appear to have acted as

technological innovators when competition increased, which added to the competitive pressure in the banking

market. Finally, our results also indicate an increase in risk-taking behaviour, along with the whole deregulation

process.

It was found in the study of Goyal and Joshi (2011a) that small and local banks face difficulty in bearing the

impact of global economy therefore, they need support and it is one of the reasons for merger. Some private

banks used mergers as a strategic tool for expanding their horizons. There is huge potential in rural markets of

India, which is not yet explored by the major banks. Therefore ICICI Bank Ltd. has used mergers as their

expansion strategy in rural market. They are successful in making their presence in rural India. It strengthens

their network across geographical boundary, improves customer base and market share.

Market Discipline and Transparency

According to Fernando (2011) transparency and disclosure norms as part of internationally accepted corporate

governance practices are assuming greater importance in the emerging environment. Banks are expected to be

more responsive and accountable to the investors. Banks have to disclose in their balance sheets a plethora of

information on the maturity profiles of assets and liabilities, lending to sensitive sectors, movements in NPAs,

capital, provisions, shareholdings of the government, value of investment in India and abroad, operating and

profitability indicators, Dr. K.A. Goyal & Vijay Joshi International Journal of Business Research and

Management (IJBRM), Volume (3) : Issue (1) : 2012 24 the total investments made in the equity share, units of

mutual funds, bonds, debentures, aggregate advances against shares and so on.

Human Resource Management

Gelade and Ivery (2003) examined relationships between human resource management (HRM), work climate,

and organizational performance in the branch network of a retail bank. Significant correlations were found

between work climate, human resource practices, and business performance. The results showed that the

correlations between climate and performance cannot be explained by their common dependence on HRM

factors, and that the data are consistent with a mediation model in which the effects of HRM practices on

business performance are partially mediated by work climate.

Bartel (2004) studied the relationship between human resource management and establishment performance of

employees on the manufacturing sector. Using a unique longitudinal dataset collected through site visits to

branch operations of a large bank, the author extends his research to the service sector. Because branch

managers had considerable discretion in managing their operations and employees, the HRM environment could

vary across branches. Site visits provided specific examples of managerial practices that affected branch

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performance. An analysis of responses to the bank’s employee attitude survey that controls for unobserved

branch and manager characteristics shows a positive relationship between branch performance and employees’

satisfaction with the quality of performance evaluation, feedback, and recognition at the branch—the

“incentives” dimension of a high-performance work system. In some fixed effects specifications, satisfaction

with the quality of communications at the branch was also important.

Global Banking

It is practically and fundamentally impossible for any nation to exclude itself from world economy. Therefore,

for sustainable development, one has to adopt integration process in the form of liberalization and globalization

as India spread the red carpet for foreign firms in 1991. The impact of globalization becomes challenges for the

domestic enterprises as they are bound to compete with global players. If we look at the Indian Banking

Industry, then we find that there are 36 foreign banks operating in India, which becomes a major challenge for

Nationalized and private sector banks. These foreign banks are large in size, technically advanced and having

presence in global market, which gives more and better options and services to Indian traders.

Financial Inclusion

Financial inclusion has become a necessity in today’s business environment. Whatever is produced by business

houses, that has to be under the check from various perspectives like environmental concerns, corporate

governance, social and ethical issues. Apart from it to bridge the gap between rich and poor, the poor people of

the country should be given proper attention to improve their economic condition. Dev (2006) stated that

financial inclusion is significant from the point of view of living conditions of poor people, farmers, rural non-

farm enterprises and other vulnerable groups. Financial inclusion, in terms of access to credit from formal

institutions to various social groups. Apart from formal banking institutions, which should look at inclusion both

as a business opportunity and social responsibility, the author conclude that role of the self-help group

movement and microfinance institutions is important to improve financial inclusion. The study study suggested

that this requires new regulatory procedures and de-politicisation of the financial system.

Employees’ Retention

The banking industry has transformed rapidly in the last ten years, shifting from transactional and customer

service-oriented to an increasingly aggressive environment, where competition for revenue is on top priority.

Long-time banking employees are becoming disenchanted with the Dr. K.A. Goyal & Vijay Joshi International

Journal of Business Research and Management (IJBRM), Volume (3) : Issue (1) : 2012 25 industry and are

often resistant to perform up to new expectations. The diminishing employee morale results in decreased

revenue. Due to the intrinsically close ties between staff and clients, losing those employees completely can

mean the loss of valuable customer relationships. The retail banking industry is concerned about employee

retention from all levels: from tellers to executives to customer service representatives because competition is

always moving in to hire them away.

The competition to retain key employees is intense. Top-level executives and HR department spend large

amounts of time, effort, and money trying to figure out how to keep their people from leaving.

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Sekaran, U. (1989) studied a sample of 267 bank employees, this study traced the paths to the job satisfaction of

employees at the workplace through the quality of life factors of job involvement and sense of competence.

Results indicated that personal, job, and organizational climate factors influenced the ego investment or job

involvement of people in their jobs, which in turn influenced the intra-psychic reward of sense of competence

that they experienced, which then directly influenced employees' job satisfaction.

Mitchell, Holtom, Lee and Graske (2001) asserted in their study that people often leave for reasons unrelated to

their jobs. In many cases, unexpected events or shocks are the cause. Employees also often stay because of

attachments and their sense of fit, both on the job and in their community.

Saxena and Monika (2010) studied a case of 5 companies out of 1000 organizations and 8752 respondents

surveyed across 800 cities in India by Business Today. The survey was on nine basic parameters like career and

personal growth, company prestige, training, financial compensation and benefits and merit based performance

evaluation. It was concluded that the biggest challenge for organizations is that when new employees appointed,

it is difficult to merge them in organizational culture. Each organization has its own unique culture and most

often, when brought together, these cultures clash. When there is no retention, employees point to issues such

as identity, communication problems, human resources problems, ego clashes, and intergroup conflicts, which

all fall under the category of “cultural differences”.

Customer Retention

Levesque and McDougall (1996) investigated the major determinants of customer satisfaction and future

intentions in the retail bank sector. They identified the determinants which include service quality dimensions

(e.g. getting it right the first time), service features (e.g. competitive interest rates), service problems, service

recovery and products used. It was found, in particular, that service problems and the bank’s service recovery

ability have a major impact on customer satisfaction and intentions to switch.

Clark (1997) studied the impact of customer-employee relationships on customer retention rates in a major UK

retail bank. He revealed that employee and customer perceptions of service quality are related to customer

retention rates and that employee and customer perceptions of service quality are related to each other .

Clark (2002) examined the relationship between employees’ perceptions of organizational climate and customer

retention in a specific service setting, viz. a major UK retail bank. Employees’ perceptions of the practices and

procedures in relation to customer care at their branch were investigated using a case study approach. The

findings revealed that there is a relationship between employees’ perceptions of organizational climate and

customer retention at a microorganizational level. He suggested that organizational climate can be subdivided

into five climate themes and that, within each climate theme, there are several dimensions that are critical to

customer retention.

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Social and Ethical Aspects

There are some banks, which proactively undertake the responsibility to bear the social and ethical aspects of

banking. This is a challenge for commercial banks to consider the these aspects in their working. Apart from

profit maximization, commercial banks are supposed to support those organizations, which have some social

concerns. Benedikter (2011) defines Social Banks as “banks with a conscience”. They focus on investing in

community, providing opportunities to the disadvantaged, and supporting social, environmental, and ethical

agendas. Social banks try to invest their money only in endeavours that promote the greater good of society,

instead of those, which generate private profit just for a few. He has also explained the main difference between

mainstream banks and social banks that mainstream banks are in most cases focused solely on the principle of

profit maximization whereas, social banking implements the triple principle of profit-people-planet .

4 Disinvestment

DISINVESTMENT OF PSUs: BENEFICIAL OR HARMFUL FOR INDIAN ECONOMY

Whenever the term disinvestment comes up some questions strike in mind? Why should the government sell

public sector shares at all? And what should the money from disinvestment be used for?

The normative theories justifying disinvestment as a direction for public policy draw their inspiration from

several different visions of a good society. With the rise of conservative governments in Great Britain, the

United States, and France, disinvestment has come primarily to mean two things:

(I) Any shift of activities or functions from the state to the private sector; and, more specifically,

(II) Any shift of the production of goods and services from public to private.

The second, more specific definition of disinvestment excludes deregulation and spending cuts except when

they result in a shift from public to private in the production of goods and services.

In India the disinvestment commission was set up on August 1996 for suggesting modalities for undertaking of

equities for select PSU’s. The purpose of disinvestment is quite simple- to get government out of business, so

that government may concentrate on sovereign functions: a set of functions that can be privatized.

There are good and bad reasons for selling public sector shares. For many decades, socialist governments

created a huge public sector mainly through borrowed money and nationalization.

In theory, the public sector belongs to the people of India. In practice it belongs to netas and babus, and has

always been a web of patronage and kickbacks. Clearly, the original rationale for a huge public sector was

farcically misguided. Today, we need an altogether different role for the state. Instead of trying to monopolize

production, or attempt what the private sector can do equally well, the state should focus on tasks that it alone

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can do: providing basic education and health, rural development, fair regulation, a decent police, a decent

judiciary and a decent administration.

Alas, for four socialist decades, ideologues focused on increasing public sector monopolies while letting critical

state functions like justice, policing and administration wither away. The state ceased to perform its most critical

functions and concentrated instead on expanding its web of patronage and kickbacks.

The best reason for disinvestment is to put an end to this, and change the role of the state. Selling government

equity will produce two lesser gains also. First, it will generally improve the management of public sector

enterprises (though there could be exceptions). Second, the sale will provide funds which can be used to

improve social services or reduce the public debt or both.

A bad reason for disinvestment is to raise some money in desperation to stave off bankruptcy in a mismanaged

economy. Yet this is the key reason why budget after budget proposes disinvestment. Further if we have to be

against disinvestment, we can say that the government system being, what it is, the cost of doing government

business is high. The present government sector displays on an average a fairly high cost of doing business than

the average of private sector. Last but not the least, there is the question of moral hazard. Does government

ownership gives it a disproportionate right in influencing policy decisions or indeed transaction decisions.

And if that happened, and I believe it does, it needs to be curbed.

Ministers are very reluctant to let go of their sources of money and patronage. Bankruptcy is finally forcing

changes, but in inconsistent ways that often means depressed sale prices. Yashwant Sinha proposed to reduce

the government's equity in public sector banks to 33 per cent, yet retain government control. But no investor will

buy bank shares in such circumstances save at throw-away prices. The nation has invested Rs 270,000 crores of

its hard earned money in 240 central PSUs and half of them lose money. It is even worse at the state level where

90 percent of the 946 enterprises are sick.

Imagine, how India might have been transformed had we invested this money in schools and primary health

centers, training our teachers and Para medics on drinking water.... Alas, it is the same nasty story of a thrifty,

vibrant, hard-working private India carrying a parasitical, corrupt public India on its back.

But Above all, Disinvestment was going to be one of Indias few recent successes, and just when the nation was

beginning to reap the rewards of enormous hard work, politicians stopped it because they had second thoughts.

It was like stopping a general in the middle of battle and question if war is good or bad. They charged that

disinvestment is a loot of public wealth, when they secretly knew that it is they who had looted the public sector

for fifty years.

They raised perverse arguments that government should not sell profit-making entities, when they realized that

these would soon become loss-making entities in tomorrows competitive economy, and be worth only a fraction

of todays value. They opposed strategic sales when they could see that this route had delivered two to ten times

more value than public sales.

So we can summarily come up to a conclusion that the government should get out, or the government should be

there. The government should watch the situation and it should become the enabler for the private sector and

slowly get out of the business as is being done now.

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Finally, after analyzing the above mentioned pros and cons I believe that the Indian disinvestment commission

has rightly recommended disinvestment at various levels for number of PSUs such as

MFIL,GAIL,MTNL,CONCOR,PHL,ET&T,HVOC,HCIL, R-ashok & U-ashok and NALCO.

For several enterprises namely ONGC, RITES, PGCL the commission has advocated no disinvestment for

present.

Above all what I believe is that disinvestment of Indian Public sector will be remembered by the history as one

of the greatest achievement of Vajpayee government, alongside the repair of our relation with US.

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5 Financial Management in PSUs

Public sector undertakings are often blamed for bad Financial Management for various reasons. The most

important of the reasons is the lack of accountability. Since, the functioning in the Public Sector Undertakings is

not only influenced by profit motive as is the case for any or most of the private sector companies, rather various

other factors such as social objective, equitable distribution of resources and wealth and addressing the needs of

priority sectors and areas are few of the factors which influence the working of Public Sector Undertakings in

India.

SPECIAL FEATURES OF FINANCIAL MANAGEMENT IN A PUBLIC SECTOR

UNDERTAKING (PSUS)

A. Role of financial advisor

The financial advisor occupies an important position in public sector undertakings. His concurrence is required

on all proposals which have financial implications.

B. Capital budgeting decisions

The power upto certain limits, in respect of individual capital expenditure items has been delegated to the board

of public sector undertakings. For making investments beyond the limit the proposal goes to Public Investment

Board which appraises and recommends projects to the Central Government.

C. Capital structure decisions

Such decisions involve the identification of different sources of finance. Normally PSUs are financed on the

basis of half of their capital being in the shape of equity and the rest in the shape of loans. The funds are also

provided to PSUs directly by the government. The following factors are taken into consideration at the time of

designing capital structure

(i) gestation period

(ii) (ii) level of business risk

(iii) (iii) capital intensity of project and

(iv) (iv) freedom of pricing.

D. Working capital management

The inventory constitutes a major portion of the working capital of public sector undertakings and hence proper

inventory management should be given top priority by public sector undertakings.

E. Audit

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Public sector undertakings in addition to regular audit conducted by professional accountants, are subject to

efficiency-cum-propriety audit by the Comptroller and Auditor General of India whose reports are presented to

Parliament every year.

F. Annual report

The annual reports of public sector units though similar to those of private sector units, tend to provide more

information

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6 Role of a financial adviser in a public sector undertaking

The financial adviser occupies an important position in all public sector undertakings. He functions as the

principal advisor to the chief executive of the enterprise on all financial matters. The committee on public sector

undertakings has specified the following functions and responsibilities for a financial adviser:

Determination of financial needs of the firm and the ways these needs are to be met.

Formulation of a programmed to provide most effective cost-volume profit relationship.

Analysis of financial results of all operations and recommendations concerning future operations.

Examination of feasibility studies and detailed project reports from the point of view of overall

economic viability of the project.

Conduct of special studies with a view to reduce costs and improve efficiency and profitability.

An important role of the financial adviser with respect to the management of public sector enterprises is the

relevance of strategic financial planning technique in dealing with conflicting objectives. It is an effective mode

to optimize the flow of funds required by the overall corporate strategy and to make adequate provisions to meet

contingencies. This requires:

The development of adequate financial information system.

The existence of clear strategic financial objectives.

The co-ordination of plan with the Government’s economic, social, fiscal and monetary policies.

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7 List of Public Sector Undertakings

Maharatna CPSEs

1. Bharat Heavy Electricals Limited

2. Coal India Limited

3. GAIL (India) Limited

4. Indian Oil Corporation Limited

5. NTPC Limited

6. Oil & Natural Gas Corporation Limited

7. Steel Authority of India Limited

Navratna CPSEs

1. Bharat Electronics Limited

2. Bharat Petroleum Corporation Limited

3. Container Corporation of India Limited

4. Engineers India Limited

5. Hindustan Aeronautics Limited

6. Hindustan Petroleum Corporation Limited

7. Mahanagar Telephone Nigam Limited

8. National Aluminium Company Limited

9. National Buildings Construction Corporation Limited

10. NMDC Limited

11. Neyveli Lignite Corporation Limited

12. Oil India Limited

13. Power Finance Corporation Limited

14. Power Grid Corporation of India Limited

15. Rashtriya Ispat Nigam Limited

16. Rural Electrification Corporation Limited

17. Shipping Corporation of India Limited

Miniratna Category - I CPSEs

1. Airports Authority of India

2. Antrix Corporation Limited

3. Balmer Lawrie & Co. Limited

4. Bharat Coking Coal Limited

5. Bharat Dynamics Limited

6. BEML Limited

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7. Bharat Sanchar Nigam Limited

8. Bridge & Roof Company (India) Limited

9. Central Warehousing Corporation

10. Central Coalfields Limited

11. Chennai Petroleum Corporation Limited

12. Cochin Shipyard Limited

13. Dredging Corporation of India Limited

14. Kamarajar Port Limited

15. Garden Reach Shipbuilders & Engineers Limited

16. Goa Shipyard Limited

17. Hindustan Copper Limited

18. HLL Lifecare Limited

19. Hindustan Newsprint Limited

20. Hindustan Paper Corporation Limited

21. Housing & Urban Development Corporation Limited

22. India Tourism Development Corporation Limited

23. Indian Rare Earths Limited

24. Indian Railway Catering & Tourism Corporation Limited

25. Indian Renewable Energy Development Agency Limited

26. India Trade Promotion Organisation

27. IRCON International Limited

28. KIOCL Limited

29. Mazagaon Dock Limited

30. Mahanadi Coalfields Limited

31. Manganese Ore (India) Limited

32. Mangalore Refinery & Petrochemical Limited

33. Mishra Dhatu Nigam Limited

34. MMTC Limited

35. MSTC Limited

36. National Fertilizers Limited

37. National Seeds Corporation Limited

38. NHPC Limited

39. Northern Coalfields Limited

40. North Eastern Electric Power Corporation Limited

41. Numaligarh Refinery Limited

42. ONGC Videsh Limited

43. Pawan Hans Helicopters Limited

44. Projects & Development India Limited

45. Railtel Corporation of India Limited

46. Rail Vikas Nigam Limited

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47. Rashtriya Chemicals & Fertilizers Limited

48. RITES Limited

49. SJVN Limited

50. Security Printing and Minting Corporation of India Limited

51. South Eastern Coalfields Limited

52. State Trading Corporation of India Limited

53. Telecommunications Consultants India Limited

54. THDC India Limited

55. Western Coalfields Limited

56. WAPCOS Limited

Miniratna Category-II CPSEs

1. Bharat Pumps & Compressors Limited

2. Broadcast Engineering Consultants (I) Limited

3. Central Mine Planning & Design Institute Limited

4. Central Railside Warehouse Company Limited

5. Ed.CIL (India) Limited

6. Engineering Projects (India) Limited

7. FCI Aravali Gypsum & Minerals India Limited

8. Ferro Scrap Nigam Limited

9. HMT (International) Limited

10. HSCC (India) Limited

11. Indian Medicines & Pharmaceuticals Corporation Limited

12. M E C O N Limited

13. Mineral Exploration Corporation Limited

14. National Film Development Corporation Limited

15. National Small Industries Corporation Limited

16. P E C Limited

17. Rajasthan Electronics & Instruments Limited

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8 GATE 2015 PSU Jobs Vacancies Opening

IIT Graduate Aptitude Test in Engineering GATE-2015 Examination Score based Public Sector Units (PSU)

Government Jobs Listed on the following Table. Several Govt Public Sector companies offers career

opportunities - the selection based on GATE score for screening for providing a salaried employment.

Eligibility: Get Valid GATE 2015 Score and holding Graduate (B.E. / B.Tech) or Post Graduate (M.Sc /

M.Tech).

GATE 2015 Papers: Aerospace, Agricultural, Architecture and Planning, Biotechnology, Civil, Chemical,

Computer Science and Information Technology, Chemistry, Electronics and Communication, Electrical,

Ecology & Evolution, Geology and Geophysics, Instrumentation, Mathematics, Mechanical, Mining,

Metallurgical, Physics, Production and Industrial, Engineering Sciences, Life Sciences.

GATE 2015 Government Jobs List: (Updated on August 2015)

PSU Name Name of Post – Total Vacancies Last Date for Apply

National Highways Authority of India

(NHAI)

Deputy Manager (Tech) - 12 17/09/2015

National Projects Construction

Corporation Limited (NPCC)

Management Trainee (Civil) - 15 30 Days from Aug 2015

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9 Conclusion

In fact, the public sector is set for a major change. It is poised for a major face lift. “The public sector will

become selective in the coverage of activities and its investment will be focused on strategic high-tech and

essential infrastructure.” The Government has also clarified that the public sector has to mend for itself and stop

relying on Government’s budgetary support. Privatisation has come as the greatest tool in the hands of the

Government for bringing efficiency in the Public Sector Undertakings. It is the process of reforming PSEs and

aims at reducing involvement of the state or the public sector in the nation's economic activities by dividing the

industries between public sector and private sector in favour of the latter. The policy of Greenfield Privatisation

has made considerable progress since the introduction of the new economic policy (NEP) in 1991. The process

of re-divide has been mainly through:

De-licensing

Reduction in budget allocation

P. K. Gupta

External aid/grant

Anomaly in duty structure

Decision-making systems.

Earlier, Financial Management was limited to accounting of various financial transactions in the Public Sector

Undertakings. Of late, Public Sector Undertakings have understood that efficiency in Financial management is

of utmost importance, if the PSUs are to survive in the competitive environment. The competition is also from

within i.e. scarce resources of the Government and from the outside world i.e. competition with private sector.

A lot has been done; still lot needs to be done to bring efficiency in the functioning of Public Sector

Undertakings.

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10 Bibliography

http://psuofindia.blogspot.in/2012/07/what-is-psu-means.html

http://planningcommission.nic.in/aboutus/committee/psu_vol1.pdf

https://en.wikipedia.org/wiki/Public_Sector_Undertakings_in_India

http://psuofindia.blogspot.in/2012/07/what-is-psu-means.html

http://disinvestmentofpsu.blogspot.in/

http://dpe.nic.in/publications/list_of_maharatna_navratna-and_miniratna

http://www.indgovtjobs.in/2014/09/gate-2015-psu-vacancies.html

http://www.caesjournals.org/spluploads/IJCAES-BASS-2012-204.pdf

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Assignment on psu