Public Sector undertakings are most suitable not only for such important areas of the economy which need huge capital investment, vast land area and also infrastructural facilities, but also where the projects are on a long-term and continuous basis.

Some key areas as laid down in the Industrial Policy Resolution of 1948 and 1956 are Arms and Ordinance, Atomic Energy, Railways, Coal, Iron and Steel, Aircraft manufacturing, Ship Building, Telephones, Minerals, Oils, Electricity, essential medicines, Sea Transport, Machine tools, Fertilisers, Life Insurance, General Insurance, Public Provident Fund, Communications etc.