Question

What is the difference between PSU and government company?

Answer 1

Public Sector Enterprises is a part of Public sector Undertakings.

Public Sector Undertaking or Enterprise refers to a Government Company. “Government Company” is defined under Section 2 (45) of the Companies Act, 2013 as Any company in which more or equal to 51% of the paid-up share capital is held by the Central Government, or by any State Government or Governments, or partly by the Central Government and partly by one or more State Governments, and includes a company which is a subsidiary company of such a Government company. 

Public Sector Undertakings (PSUs) can be classified as Public Sector Enterprises (PSEs), Central Public Sector Enterprises (CPSEs) and Public Sector Banks (PSBs).

Public Sector undertakings refer to commercial ventures of the Government where user fees are charged for services rendered. The tariff/fees may be market based or subsidised. They are usually fully owned and managed by the Government such as Railways, Posts, Defence Undertakings, Banks etc. Public sector enterprises on the other hand refer to those companies registered under the Companies Act, 1951,which are predominantly owned by Government and which are managed by a Government appointed Chairman and Managing Director. Government nominees represent the interests of the Government on the board of Public sector enterprises. Public sector companies usually compete with private sector enterprises in the domestic as well as international market.

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