Quick Answer: What Happens If PSU Is Privatised?


Oil and Natural Gas Corporation (ONGC) is an Indian public sector multinational crude oil and gas company.

Its registered office is in New Delhi.

In a survey by Government of India for fiscal year 2019–20, it was ranked as the largest profit making PSU in India..


This includes businesses like Container Corporation of India, Bharat Earth Movers and Shipping Corporation of India. None, though, match up to BPCL, India’s second-largest PSU by revenues in 2018-19.

Can PSU be Privatised?

Last month, Finance Minister Nirmala Sitharaman had announced that there will be a maximum of four public sector companies in strategic sectors while state-owned firms in other segments will eventually be privatised. … All non-strategic PSUs (public sector undertakings) will be sold when we can do it.

How many PSU are Privatised?

Names of the 23 PSUs, in which Govt plans to sell or divest stakes, The percentage of share the government is planning to sell/divest, and.

Why did Modi govt sell PSU?

There are more than 270 public sector undertakings in India. … Modi government believes that selling its stake in “ailing” PSUs will not only garner the required fund and technology to run these companies but will boost the investment drive also.

Is BHEL getting Privatised?

The central government on February 4, 2020 stated that it has not taken any decision for strategic disinvestment and privatization of BHEL. … The Minister ruled out the disinvestment of Bharat Heavy Electricals Limited (BHEL).

Can NTPC be Privatised?

Among eleven PSUs in power generation, including NTPC, NHPC and SJVN, a handful can either be privatised or be sold to stronger ones. There were 249 operating Central PSUs as on March 31, 2019.

What happens if PSU Privatised?

Privatisation leads to creation of wealth. The cost of production is reduced and profits are maximised. It is certainly a good step if the government feels that a particular sector can be opened up to competition and it will benefit the market and the consumer.

Will NTPC get Privatised?

At present, the Government of India holds 54.5% stakes in NTPC. As an initial step of disinvestment, the Centre plans to reduce its stakes below 51%. … “If the government sells its stakes and brings it below 51%, the management’s control will also be transferred which will lead to total privatisation of NTPC,” he said.

Is Privatisation good or bad for India?

Privatization is beneficial for the growth and sustainability of the state-owned enterprises. … Privatisation always helps in keeping the consumer needs uppermost, it helps the governments pay their debts, it helps in increasing long-term jobs and promotes competitive efficiency and open market economy.

What is wrong with Privatisation?

In a privatised service, profits must be paid to shareholders, not reinvested in better services. Interest rates are higher for private companies than they are for government. Plus, there are the extra costs of creating and regulating an artificial market.

Is disinvestment good or bad for India?

This approach has yielded good dividends for the government. Disinvestment is a major source of resources for investment in infrastructure and social sectors. These resources can be used to pay off the past debt and lower the interest burden of the government. … Disinvestment helps to improve efficiency of such entities.

Is ONGC going to be Privatised?

Disinvestment or privatisation of ONGC is not happening,” Pradhan said. In a transparent bidding process, the government is keeping some of the discovered oilfields of ONGC on a public domain based on a criteria which will produce more and pay higher to the government, he said.

Is ONGC running in loss?

State-owned Oil and Natural Gas Corp (ONGC) on Tuesday reported its first-ever quarterly loss after it took an impairment on the slump in oil and gas prices. India’s top oil and gas producer reported a ₹3,098-crore loss in the January-March quarter compared with a profit of ₹4,240 crore in the same period a year back.

Is Privatisation of PSU good or bad?

Loss-making PSUs certainly merit privatisation — but no one would buy them with their huge debt and employee liabilities. The government may even have to pay the buyer, as it happened in the case of the Delhi Discom privatisation. Even then it may be worth it, since privatisation will stop fiscal flows to these PSUs.