A PSU company, or Public Sector Undertaking, is a company that is owned and managed by the government of India or state governments. The government holds a majority stake (51% or more) in PSUs. A PSU company is a public sector undertaking (PSU) company, which is a company wherein the state has a controlling or majority stake. These companies are instrumental to the economic building of any country in areas such as energy, banking, telecommunications, and manufacturing. A PSU is a government company formed to perform public welfare and national interest business activities. The PSU company’s meaning revolves around government control with a profit-making aim; that is, the crucial industries for a country will be under government control while procuring revenues.
What is PSU Company?
The full form of a PSU company is a Public Sector Undertaking. These companies are owned and controlled by the government, fully or partially, to ensure economic viability and national growth. In India, major PSU companies are classified based on revenue, profit, and operational significance. The classification has been divided into three main classes: Maharatna PSU, Navratna PSU, and Miniratna PSU. The PSU companies provide employment, infrastructure development, and economic stability.
Characteristics of PSU Companies
- Government Ownership – The government holds a major portion of the stake, exercising control over the major decision-making processes.
- Social Welfare Objective – These companies pursue both commercial and social objectives.
- Large-Scale Borrowing – The PSUs run in important sectors such as energy, transport, and defence.
- Job Security – You can find assured job security and nice salary perks in these companies.
- Government Pricing – Prices in PSUs are often regulated under government pricing policies, unlike prices in private firms.
- Public service orientation– Public sector companies are not profit-oriented but rather the welfare of people.
- Strategically Important– PSUs deal with sectors like energy, defence, and infrastructure, which are quite important from the security perspective of the country.
- Government Regulation- Unlike private firms, PSUs follow government policies, including price regulations.
- Limited Competition- Most PSUs are monopolistic in their fields, such as Coal India in coal.
Definition of PSU Company
A PSU company is described as an ownership body where more than 50% of shares are held by the government, either centrally or at the state level. They are formed to support industries, create jobs, and deliver services the public needs. While they function like private businesses, these companies ultimately act under government regulations and public policy.
Types of PSU Companies in India
The Indian government classifies PSU companies into three categories based on their revenue, profits, and economic importance. Classification based on financial performance is as follows:-
| Category | Eligibility Criteria | Examples |
| Maharatna PSU companies | ₹5,000 crore net profit for three years, ₹25,000 crore net worth | ONGC, NTPC, Indian Oil Corporation |
| Navratna PSU companies | High financial autonomy, ₹3,000 crore net profit for three years | Bharat Electronics, Hindustan Aeronautics |
| Miniratna PSU companies | Smaller PSUs with profit-making records | Airports Authority of India, IRCTC |
Maharatna PSU Companies
Maharatna PSUs are the most autonomous among PSUs in investment and decision-making– these are giants, profit-making, and multinational corporations. They contribute significantly toward energy in transportation and heavy industries, contributing to the nation’s economic stability. Some names that top the list of PSUs in India, like ONGC, BHEL, and SAIL, fall under this category.
Navratna PSU Companies
Navratna PSUs have limited powers over financial decision-making. Profitable corporations belong to the sectors of engineering, electronics, and aerospace. Navratna companies such as Bharat Electronics Limited and Hindustan Aeronautics Limited play a very important contribution to India’s industrial development.
Miniratna PSU Companies
Miniratna PSUs constitute smaller companies earning regular profit and contributing to niche sectors like tourism, aviation, and logistics. This list of PSU companies in Miniratna includes IRCTC, the Airport Authority of India, and Balmer Lawrie.
PSU vs Private Company
In all respects, PSU and private companies may operate in a similar business environment; however, their goals and operations are quite different and often contrast.PSU companies are the suppliers of job stability, price regulation, and national economic contributions, while private companies are more focused on profit and innovation accompanied by competition.
| Aspect | PSU Company | Private Company |
| Ownership | The government holds a majority stake | Owned by individuals or shareholders |
| Objective | Public welfare and national development | Profit maximisation |
| Job Security | High, with pension benefits | Dependent on company performance |
| Decision-Making | Slower, due to government policies | Faster and market-driven |
| Competition | Limited, often monopolistic | Highly competitive market |
| Funding | Government-backed | Private investment and shareholders |
Advantages of PSU Companies
PSU contributes to economic growth, employment, and national security. Their government support makes them financially stable and not too much dependent on market fluctuations. Benefits of PSU Companies are:-
- Employment Opportunities– Public sector jobs ensure job security and earn a good salary with excellent benefits.
- Nation Building – These companies play a major role in infrastructure, energy, and defence sectors.
- Financial Stability– Public sector companies are less prone to bouts of sudden financial crises, not to mention their closings.
- Government Support – Public sector banks get funding and policy support from the government.
- Social Responsibility – They advocate for the public’s welfare, rural development, and corporate social responsibility (CSR).
PSU Company Recruitment and Salary
To secure a job in a PSU company, one is supposed to clear several competitive exams such as GATE (for engineers), banking exams (for PSU banks), or UPSC (for administrative). Many PSUs have their own written entrance and selection tests. PSU jobs ensure high salaries, added perks, and job security. These amounts differ according to the specific company, position, and experience level. The PSU company compensation structure is as follows:-
| Job Role | Average Salary (Per Year) |
| Engineer | ₹8-12 lakh |
| Manager | ₹10-15 lakh |
| Senior Executive | ₹15-25 lakh |
PSU employees also receive medical benefits, housing allowances, and retirement pensions, making these jobs highly desirable.
Top PSU Companies in India
Some of the largest PSU companies in India comprise:
- Indian Oil Corporation (IOC) – Largest oil refining and marketing PSU;
- Bharat Heavy Electricals Limited (BHEL)-Engineering and manufacturing PSU;
- Oil and Natural Gas Corporation (ONGC)-Topmost PSU in oil and gas exploration;
- National Thermal Power Corporation (NTPC)-A foremost PSU in power generation;
- Steel Authority of India Limited (SAIL)-Major steel manufacturing PSU. These Maharatna PSUs are great contributors to India’s industrial and economic growth.
PSU Company FAQs
1. What is PSU company’s full form?
PSU will mean Public Sector Undertaking. These are government companies that are running in the field of public importance.
2. What are the different kinds of PSU companies in India?
The classification of PSUs depends on their financial performance into three categories: Maharatna, Navratna, and Miniratna.
3. What are the advantages of working in PSU companies?
PSU jobs give respectability, remuneration, and benefits from the government and include the old-age security scheme.
4. How do I get a job in PSU companies?
Most PSUs recruit through GATE, banking exams, UPSC, and through their direct recruitment exams.
5. What makes PSU different from private companies?
PSUs are government-owned and ensure the public interest concerning employment, while the private sector is primarily profit-oriented and competitive.
