Public sector units (PSUs) are the subsidiaries of big companies that have been reorganized for efficiency and operational feasibility. There are 81 PSUs in India, some of which have been de-merged. PSUs have a variety of functions, but most are used by the government for economic purposes. State-owned enterprises (SOEs) are also considered PSUs. These quasi-government agencies provide incentives to banks and are usually subject to government regulation.
There are different categories of PSUs, such as public utilities and private enterprises. A PSU can be a government-owned company, a statutory corporation, or a nationalised corporation. PSUs are vital to the economy of a country and are considered decent investments for long-term investing. However, many investors struggle to decide whether PSUs are suitable for their portfolios. Here are a few things to keep in mind before investing in PSUs.
A PSU can have any number of different roles, and the definition varies by sector. NTPC Limited is the first PSU in India. It was founded in 1932, and Tata himself was one of the first to fly an airplane – a single-engine de Havilland Puss Moth. The company would eventually become Air India. The public sector was originally thought to be a catalyst for steady economic growth.
The performance of public sector units is closely tied to the country’s economic growth. However, recent economic performance has not been encouraging for India’s infrastructure major sector. Analysts estimate that it will take some time before it begins to improve. The recovery of the infrastructure major sector will help the rest of the economy, as well as the allied sectors. And the government’s ability to increase tax revenue, reduce imports, and cut subsidies are all positive indicators for PSUs.
Public sector employees can earn between 7 and 20 lakhs per annum and work until they are 25. They will be rewarded with time-bound promotions and various increments. In addition, public sector employees enjoy full medical insurance, job security, and accommodation benefits. Moreover, many PSU employers offer employees their own houses. A government job is a great choice for a career in the public sector. So, consider getting a public sector job today. You’ll never regret it!
While many PSU companies have suffered significant de-rating over the past eight years, their future earnings prospects have been very good. The government’s divestment agenda will unlock significant value in many PSUs, boosting the overall value of the entire sector. If you’re wondering if investing in PSUs is the right decision for you, the answer is yes. And the best way to invest in PSUs is through mutual funds.
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