Public Sector Undertakings in India

Depending on their financial performance and progress, CPSUs are granted the status of Maharatna, Navaratna, and Miniratna (Category I and II).

The government initially prioritized strategic sectors, such as communication, irrigation, chemicals, and heavy industries, followed by the nationalisation of corporations.

PSUs subsequently expanded into consumer goods production and service areas like contracting, consulting, and transportation.

Their goals include increasing exports, reducing imports, fostering infrastructure development, driving economic growth, and generating job opportunities.

[7][8] Other contemporary criticisms of India's public sector targeted the lack of well-funded schools, public libraries, universities, hospitals and medical and engineering colleges; a lack seen as impeding an Indian replication of Britain's own industrialization in the previous century.

[15] The first Prime Minister of India, Jawaharlal Nehru, promoted an economic policy based on import substitution industrialisation and advocated a mixed economy.

[16] He believed that the establishment of basic and heavy industry was fundamental to the development and modernisation of the Indian economy.

[17][18] In 1969, Indira Gandhi's government nationalised fourteen of India's largest private banks, and an additional six in 1980.

[15] After the crisis, the government began divesting its ownership of several PSUs to raise capital and privatize companies facing poor financial performance and low efficiency.