We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.
Finance

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

What are Public Sector Undertakings?

Malcolm Tatum
By
Updated: May 17, 2024
Views: 15,018
Share

Public sector undertakings (PSUs) are corporations that are owned and operated by a local, state, or national government. The term itself is often used in India, referring to the range of government-owned corporations that are in operation within that country. In other areas of the world, businesses of this type may also be known as PSUs or simply referred to as companies in the public sector.

The range of public sector undertakings can include just about any type of business. It is not unusual for a government to own utility companies that supply electricity or telecommunication services to specific areas within the nation. Another common example of a company in the public sector involves mining operations, especially those that supply coal or other essentials in the production process of other PSUs owned by that same government.

In some cases, public sector undertakings are focused less on the production of goods and more on managing the delivery of those goods to the general public or commercial consumers. This means that a transportation network may be owned and operated by a government, including rail lines or even air-based courier services. A PSU may also be involved in the allocation of goods and services to other government entities, using guidelines provided by the government itself.

Depending on exactly how public sector undertakings are structured, they may or may not be required to earn a profit each year, another factor that sets this type of business operation apart from privately held corporations. In many instances, the reason for the PSU is to help stimulate commerce among other types of businesses by providing something that encourages participation by others in the nation’s economy. For example, a postal system provides a much needed service that may or may not post a profit in any given year, while still giving individuals and businesses a means of communication that can be used to create jobs and help generate activity within the economy.

While it is not unusual for many governments to hold some interest in different kinds of businesses, one of the defining characteristics of public sector undertakings is the amount of interest that the government holds. In most cases, a company cannot truly be considered a PSU unless a government entity holds at least 51% ownership in that business. Should the government agency or entity hold less than a controlling interest in the company, it normally does not fit the pattern and is not subject to any tax or other operational regulations that specifically apply to government-owned entities.

Share
WiseGeek is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Malcolm Tatum
By Malcolm Tatum
Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing to become a full-time freelance writer. He has contributed articles to a variety of print and online publications, including WiseGeek, and his work has also been featured in poetry collections, devotional anthologies, and newspapers. When not writing, Malcolm enjoys collecting vinyl records, following minor league baseball, and cycling.

Editors' Picks

Discussion Comments
By Melonlity — On Feb 01, 2014

A good example of this in the United State, I think, would be Fannie Mae and Freddie Mac -- two government sponsored entities which back the majority of mortgages in the United States. Those were created during the Great Depression as ways to create home ownership in that nation by making sure banks had money to loan to people wanting to buy houses.

Malcolm Tatum
Malcolm Tatum
Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing...
Learn more
Share
https://www.wisegeek.net/what-are-public-sector-undertakings.htm
Copy this link
WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.

WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.