PUBLIC SECTOR

REFORMS

Name – Sam Peter Georgie

Roll No- 19224
Section - MB

bmitted to - Prof. Shagun Arora

 Introduction

• In India, a government owned sector is termed as a public sector

undertaking (PSU). This term is used to refer companies which
the government own a majority (51 percent or more) of the
company’s equity.

• Public sector consists of all the industrial and commercial

enterprises which are owned by the government and managed
either by government or any other authorised body on behalf of
the government.

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 Objectives of Public
Sector
▸ To attain commanding heights of the economy

▸ It creates the necessary infrastructure for economic development

▸ To earn return on investment and generate resources for development

▸ To promote redistribution of income and wealth

▸ To generate employment opportunities

▸ To promote balanced regional development

▸ To assist the development of small-scale industries

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CATEGORIES

 Maharatna

 Navaratna

 Miniratna

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 Criteria For Being a
Maharatna

▸ The company already holds Navratna status.

▸ It is listed on the Indian stock exchange fulfilling the
minimum prescribed public shareholding according to the
SEBI regulations.
▸ Average annual profit more than Rs 5000 crore for 3
years or average annual net worth more than Rs 15000
crore for 3 years or Average annual turnover more than
Rs 25000 crore for 3 years.
▸ Invest up to 15% of net worth or Rs 1000 crore to 5000
crore

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 Criteria For Being a Navratna

▸ The company must have ‘Miniratna Category – I‘ status along

with a schedule ‘A’ listing.
▸ It should have at least 3 ‘Excellent’ or ‘Very Good’ Memorandum
of Understanding (MoU) during the last five years.
▸ Need a score of 60 out of 100 on the following parameters like
net profit, net worth, total manpower cost, total cost of
production etc.
▸ Invest up to 15% of net worth or upto Rs 1000 crore.

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 Criteria For Being a Miniratna

Eligibility and Benefits of Miniratna Category -I:

profit of Rs 30 crore or more for consecutive 3 years.

Invest up to Rs 500 crore or equal to net worth whichever is
lower.

Eligibility and Benefits of Miniratna Category -II:

profit for consecutive 3 years.
Invest up to Rs 300 crore or 50% of net worth whichever is lower.

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 DISINVESTMENT

• The action of an organisation or government selling or

liquidating an asset or subsidiary

• Disinvestment is the withdrawal of capital from a

country or corporation.

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Privatisation

▸ Privatisation means allowing the private sector to

set up more and more of industries that were
previously reserved for public sector.
▸ Change in ownership: Degree of privatisation
judged by the extent of ownership transferred from
public to private sector.

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 Objectives of
Privatisation

▸ To increase efficiency & competitive power of the

enterprises
▸ To strengthen industrial management.
▸ To earn more & more Foreign currency.
▸ To make optimum use of resources
▸ To achieve rapid industrial development of the country.

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 Objectives of Disinvestment

 To reduce the financial burden on government

 To improve public finances

 To introduce, competition and market discipline

 To increase growth of the firm

 To encourage wider share of ownership

 

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 Disinvestment and Privatization of
LIC by Indian Government
 
 The government has decided to get LIC listed on the markets. The announcement
was made by Finance Minister Nirmala Sitharaman in her Budget Speech. 

 The resolution is in line with the aim of the government to ponder on stake sale in
government institutions, shore up finances thereby allowing the PSUs to generate
resources. Disinvestment for FY21 by the government has been marked at Rs. 2.11
lakh Crore. 

 The government expects to get about Rs 90,000

crore by selling 6-7 per cent of LIC in the coming
year.However,the gains from the LIC disinvestment
can go beyond the revenue that will be earned.

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THANK YOU