Briefly discuss the problems faced by Public Sector Undertakings in India.
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The various problems faced by PSUs are as follows:
- Underutilisation of capacity: The PSUs operate much below the optimum level of output. This inflates the costs of the goods or the services.
- Overstaffing: The PSUs are generally overstaffed. This further adds to the cost of the product.
- Unprofitable pricing: The PSUs operate with a social motive and generally provide goods and services at subsidised rates. The pricing strategy followed by them is unprofitable.
- Heavy losses: Because of higher burden of cost and unprofitable pricing policy, PSUs incur heavy losses.
- Sick units: A number of sick PSUs are operational, which prove to be a burden for the country.
- Lack of autonomy: PSUs are generally not allowed to act as autonomous units. This results in delay in decision-making, leading to a loss in availing business opportunities.
- Bureaucratic delays: The PSUs suffer from various bureaucratic delays due to red-tapism, faulty planning, procedural delays, etc.
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