A PSU is a Public Sector Undertaking or a company promoted or majority held (51%+) by the government using Taxpayers moneys.
Here is an interesting PSU Quiz that gives u a general Idea about PSUs.
Navratnas are the Creme de la Creme of Psus and are the list of the top 9 PSUs of the govt.
The main defense for such poor performance is that PSUs are for public service and not Profit. Is this the sole reason that private cos outperform them?
Sadly i think not
In comparison to the private sector, PSUs have failed to give a fair returns to minority shareholders even though they sometimes work as a Monopoly take for example our Oil PSU Navratnas like ONGC, HP, BP and IOC. When they are not monopoles they are failures and a constant drain on public funds ie zombie companes take for example Air India
The govt systematically skims profit in the name of subsidy burden and it is supposed to be fair just because it is in plain view.
You can definitely blame India’s powerful bureaucracy, whose culture lacks accountability.You can also blame the method of selecting top PSU managements, based on hierarchy and political connections, because most often then not PSU bosses come from unrelated fields and have no experience on how to run that business, but then again are they really appointed to run firms efficiently or obey diktats and refurbish politicians houses one still cant really decide.
Dont forget that ex psu employees have played a vital part in the Laxmi Mittals success story . Read The Raja Of Steel
Political ego also plays a big hand … Subir Rahas ouster shows
To tell you the truth it all comes down to mismanagement and political interference, and a wanton disregard for accountability of public funds to serve their own petty interest and help/aid and benefit cronies and big business with deep vested interests.
The way the current UPA govt has been going about it, is simply ludicrous . No wonder frustrated shareholders have gone to court (never mind the brotherly spat and chote bhaiyas nudge)
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