Public Sector Undertakings (PSUs) in India face the conundrum of fulfilling its social objectives in the light of growing competition from the private sector and high concern for profitability. Elucidate with relevant examples.

Answer: Answer: Hint: Failure of PSUs to sustain in a highly competitive and technology intensive industrial sector with a deficiency in management and efficiency of the PSUs.
Reasons for PSUs to create the desired impact, especially in the pre-LPG era

1. Functioning as departmental extensions of the Ministry
2. Excessive bureaucratic control at the top
3. Overstaffing and disguised unemployment
4. Infested with nepotism, favouritism and corruption
5. Lack of autonomy and accountability while performing commercial functions led to failure in ensuring import substitution and capital formation
6. Increase in overall fiscal deficit of the central and state governments, exposing the Indian economy to the imbalances of trade and high debt.
   Case Studies: Air India & BSNL

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