Definition
PSU (Public Sector Undertaking)
A Public Sector Undertaking is a company in which the central or state government holds a majority stake, operating in areas from energy to banking.
PSUs are government-owned enterprises, central ones called CPSEs and state ones SLPEs, spanning oil, power, mining, defence, banking and more. They were built to develop strategic and capital-intensive sectors and remain large employers and contributors to the exchequer through dividends and taxes.
The government classifies profitable CPSEs as Maharatna, Navratna or Miniratna based on size and performance, granting them operational and financial autonomy. PSUs are also central to disinvestment and strategic sale policy as the government calibrates its presence across sectors.
Related terms
- DisinvestmentDisinvestment is the sale by the government of part or all of its stake in a public sector enterprise to raise resources or improve efficiency.
- Strategic SaleA strategic sale is disinvestment in which the government sells a controlling stake in a public sector firm together with management control to a private buyer.
- Maharatna, Navratna, MiniratnaThese are categories of central public sector enterprises granted increasing levels of financial and operational autonomy based on their size and performance.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.