37 psus – control, management & performance

7/29/2019 37 PSUs control, management & performance

1/19

Public Sector Undertakings

CONTROL, MANAGEMENT &

PERFORMANCE

Parth R Shah 11MBAO91

Viral Doshi 11MBAO14


2/19

A pubic sector undertaking may be defined as anycommercial or industrial undertaking owned and managed

by the government with a view to maximise social welfare

and uphold the public interest

Public enterprises consist of nationalised private sector

enterprises, such as, banks, Life Insurance Corporation of

India and the new enterprises set up by the government suchas Hindustan Machine Tools (HMT), Gas Authority of India

(GAIL), State Trading Corporation (STC) etc.

WHAT IS PSU?


3/19

Objective of public sector

1. To attain commanding heights of the economy.

2. To provide commercial surplus to finance

economic development.

3. To provide rapid economic development by

filling critical gaps in the industrial structure.

4. To provide basic infrastructure facilities.

5. To ensure balance regional development.


4/19

6. To reduce sharp disparity of income and preventconcentration of economic power in few hands.

7. To effect social control and regulation of long-term

finances through government financial institutions.

8. To achieve self-reliance in critical areas.

9. To create employment opportunities on an increasingscale.

10. To help improve foreign exchange earnings.

Continue


5/19

Forms of Public Units


6/19

It is established by the government and its overall

control rests with the minister.

It is a part of the government and is managed like any

other government department.

It is financed through government funds.

It is subject to budgetary, accounting and audit control.

Its policy is laid down by the government and it is

accountable to the legislature.

DEPARTMENTAL UNDERTAKINGS


7/19

It is incorporated under a special Act of Parliament or State

Legislative Assembly.

It is an autonomous body and is free from government control in

respect of its internal management However, it is accountable to

parliament and state legislature.

It has a separate legal existence. Its capital is wholly provided bythe government.

STATUTORY CORPORATIONS


8/19

It is managed by Board of Directors, which is composed of individuals

who are trained and experienced in business management. The members

of the board of Directors are nominated by the government.

It is supposed to be self sufficient in financial matters. However, in case

of necessity it may take loan and/or seek assistance from thegovernment.

Continue


9/19

(a) It is registered under the Companies Act, 1956.

(b) It has a separate legal entity. It can sue and be sued, and can acquire

property in its own name.

(c) The annual reports of the government companies are required to be

presented in parliament.

(d) The capital is wholly or partially provided by the government. In case

of partially owned company the capital is provided both by the

government and private investors. But in such a case the central or state

government must own at least 51% shares of the company.

GOVERNMENT COMPANIES


10/19

It is managed by the Board of Directors. All the Directors or the

majority of Directors are appointed by the government, depending upon

the extent of private participation.

Its accounting and audit practices are more like those of privateenterprises and its auditors are Chartered Accountants appointed by the

government.

Its employees are not civil servants. It regulates its personnel policiesaccording to its articles of associations.

Continue


11/19

Performance of PSE

No of PSE which was only 5 in 1950 was raised to 242 in 2008

Investment in CPSE raised from 29 crores (1951) to 4,55,409

crores in 2008.

In number of profit making PSE was increased to 160 from 119

No. loss making PSE was came down to 53 from 105

PSE earned foreign exchange of Rs. 74,283 crores in 2008 majorearnings from oil companies

The total number of employees in Central PSUs was 1.53 mn in

FY09 and came down to 1.49 mn in FY10


12/19

Continue

The 18 Navratnas had a total income of Rs 8,478 bn in FY09, as

compared to Rs 7,052.56 bn in FY08.

In FY09, the navratnas total income was equivalent to 15.20% of

Indias GDP (at current market prices) and it rose from 14.15% in

FY07 to 14.25% in FY08.


13/19


14/19

Having Navratna status.

Listed on Indian stock exchange with minimum prescribedpublic shareholding under SEBI regulations.

An average annual turnover of more than Rs. 20,000. crore

during the last 3 years.

An average annual net worth of more than Rs. 10,000 crore

during the last 3 years.

An average annual net profit after tax of more than Rs. 2500crore during the last 3 years.

Should have significant global presence/international

operations.

Maharatna Company


15/19

Performance Parameters Maximum Marks

Net Profit to Net Worth 25

Manpower cost to cost of production or

services

15

Gross margin as capital employed 15

Gross profit as Turnover 15Earnings per Share 10

Inter-Sectoral comparison based on Net profit

to net worth

20

Total 100

Having Schedule A and Miniratna Category-1 status.

Having atleast three Excellent or VeryGood Memorandum of Understanding (MoU)ratings during the last five years.

Having a composite score of 60 or above out of 100 marks based on its performance

during the last three years on the following six identified efficiency parameters:

Navratna company


16/19

Miniratna CompanyCategory I

This category applies to PSEs that have made profits continuously for

the last three years or earned a net profit of Rs. 30 crore or more in

one of the three years.

These miniratnas granted certain autonomy like incurring capital

expenditure without government approval up to Rs. 500 crore or equalto their net worth, whichever is lower.

Category II

This category include those PSEs which have made profits for the last

three years continuously and should have a positive net worth.

Category II miniratnas have autonomy to incurring the capital

expenditure without government approval up to Rs. 300 crore or up to

50% of their net worth whichever is lower.


17/19

MAHARATNA CPSEs

Coal India Limited

Indian Oil Corporation Limited

NTPC Limited

Oil & Natural Gas Corporation Limited

Steel Authority of India Limited

NAVRATNA CPSEs

Bharat Electronics Limited

Bharat Heavy Electrical LimitedBharat Petroleum Corporation Limited

GAIL (India) Limited

Mahanagar Telephone Nigam Limited

Power Grid Corporation of India Limited


18/19

MINIRATNA Category I CPSEs

Airports Authority of IndiaBharat Dynamics Limited

Bharat Sanchar Nigam Limited

Indian Railway Catering & Tourism Corporation Limited

Central Warehousing Corporation

MINIRATNA Category-II CPSEs

Bharat Pumps & Compressors Limited

Broadcast Engineering Consultants (I) LimitedCentral Mine Planning & Design Institute Limited

Ed.CIL (India) Limited

Engineering Projects (India) Limited


19/19

37 psus – control, management & performance

Documents