Since the ‘liberalisation’ of the economy, the environment of PSUs has under­gone substantial change. Given the stated objec­tives of government to divest and privatize, entry of private firms into markets earlier reserved for public sector, many PSUs would have responded to these changes in some manner.

Currently the government is pursuing disinvestments, which is driven more by budgetary considerations. It is not yet clear as to how strong is the intention of the government to improve the task orientation and performance of PSUs through increased au­tonomy to the managers.