The policy will present a road map for the presence of government-owned entities in strategic and non-strategic sectors. It was announced as a coherent policy wherein all the sectors would be opened for private sector participation. The government had also announced to limit the presence of PSUs to one to four in strategic sectors. The government wanted to privatize, merge or bring the remaining companies under a holding company. After this policy will come into force, the government will completely exit from the companies in non-strategic sectors. The timing of the privatization of non-strategic sector companies will be decided on a case-by-case basis.

 

The Department of Investment and Public Asset Management had classified 18 sectors as strategic sectors that include fertilizers, telecom, power, banking, defense, and insurance. These sectors have been categorized as the mining and exploration, manufacturing and processing, and services. Whereas, the state-owned enterprise is called a Public Sector Undertaking (PSU) or a Public Sector Enterprise in India. The PSU is owned by the Union Govt or one of the state or territorial govts.

 

It can also be owned by both in parts. The majority of the stock of the company in a PSU owned by the government. PSUs are of two types- central public sector enterprises (CPSUs, CPSEs) or state level public enterprises (SLPEs). PSUs are administered by the Ministry of Heavy Industries and Public Enterprises. Until the year 1951, there were just 5 enterprises in the public sector. Over years, the number has increased and as of March 2019, the number has reached 348.