ASKWB

Now I place these queries in this forum:
(1) Who are the so called “normal govt. employees”?
(2) If PSU employees are govt. employees why can’t the teachers of aided/sponsored schools get the status of govt. employees?
(3) Is there any practical difference between a govt. organisation and a PSU ?
(4) What is the difference between a PSU and a Pvt. Co. when both are making profit by selling products?
(5) Indian Rly, Dept. of Posts, BSNL, SAIL, Nationalised Banks like SBI, UBI etc, State Transport Corpns., Air India etc. – Are they all PSUs because of making profits?
(6)Why are not Income Tax Deptt., Customs & Excise dept., Sales Tax dept. etc. called PSUs?

@bithi_dutta
Very difficult questions. Yet, I can make an attempt to answer from my limited knowledge.
(1)The term “normal” has no meaning here. Probably, your friends/relatives use the term to highlight the prospects and monetary gains in their services compared to the govt. employees in respect of salary & facilities like TA, LTC, HRA, medical treatment etc.
Govt. employees are those persons who are employed under the Govt. (Central/State), receiving salaries which are debited to the Consolidated Fund of the Govt. Salaries of most of the PSU employees are debited to the fund other than the consolidated fund of the Govt.
(2)All the PSU employees are not Govt. employees as PSUs are not always fully under the control of govt. These are mostly autonomous bodies formed by some Acts of the Govt. for commercial & industrial activities. Employment in PSUs is called foreign service. PSU employees receive pay with govt. sanction from the fund other than the consolidated fund of the Govt. Teachers in aided/sponsored schools are paid from grants-in-aid of revenues of the state govt.
(3)Govt. organizations are fully owned, managed & controlled by the Ministry of the Govt. and involved in developmental works not connected with commercial activities in the interest of common people.
PSUs are mostly autonomous bodies owned (wholly or partly), controlled & managed by the Govt./Local Authorities, having objective to serve the public through commercial activities.
(4)Pvt. Companies are owned by individuals, managed by the owners & professional managers and involved in commercial & industrial activities, being funded by their own sources, loans, other private sources and, operate in all areas with adequate return on investment, with main aim to make money (maximum profit), do not have accountability to the public.
PSUs are owned (wholly or partly), managed and controlled by the Govt./Local Authorities, get capital mainly from the Govt. and sometimes from the public issues, have public accountability, operate in basic and public utility sectors with main objective to maximize social welfare and ensure balanced economic development. Profit making is the secondary objective.
(5)Indian Rly, Dept. of Posts, BSNL, SAIL, Nationalised Banks like SBI, UBI etc, State Transport Corpns., Air India etc -these are all PSUs providing essential & utility services to the public at cheaper rate.
Three types of PSUs:
(a)Departmental Undertakings: Function under overall control of a Ministry of the Govt., receive fund from the Govt. like Govt. Deptts., provide ESSENTIAL SERVICES for the public. Maximum Govt. interference. Example: Rly, Dept. of Posts, BSNL, DD, AIR, Ordnance Factory etc.
Indian Railways is a part of the Central Government, though its management has been delegated to the Railway Board by the President of India.
(b)Statutory Corporations (Public Corpn.): Autonomous bodies created by the spl. Act of the Parliament/ State Legislature which define their power, function & management. Owned by the Govt. but, free from Govt. control in respect of internal management. Received capital wholly from the Govt.; supposed to be self-sufficient but may take loan/ assistance from Govt., if necessary. They are controlled by the Board of Directors, Board members are Govt. nominees. They are independent of Govt. interference and have flexibility in operation and taking of decision, provide UTILITY SERVICES. Example: LICI, FCI, UTI, State Transport Corpns., SBI, State Electricity Boards, ONGC Etc.
(c) Govt. Companies: ORIGINAL BUSINESS UNITS OF THE GOVT., registered under Company Act and fully governed by that Act, Managed by the Board of Directors where whole or majority of the directors are appointed by the Govt., depending on private participation. Capital is provided wholly or partially by the Govt. In case of partial funding, Govt. hold 51% or more of its capital for business while the rest coming from private investors. Operate in some specific fields in contrast to the Pvt. Cos. Employees are not civil servants. Example: SAIL, GAIL, HMT etc.
(6) Income Tax Deptt., Customs & Excise dept., Sales Tax dept. etc. are all govt. departments operating for revenue earning under full control of the Ministry. They are not at all meant for commercial or business activities of the Govt. Whatever amount is collected by them as revenues flows to the Govt. fund.

……..Am I right?
What is the meaning of “foreign service” and “Consolidated Fund of the Govt.”?
Why are the employees of Govt. Companies like SAIL, GAIL etc. not civil servants when those of other PSUs (Departmental Undertakings and Corporations) are civil servants?

Answer to the first part: Yes, you are right in your understanding of the basics of PSU.
For the second part:
Govt. accounts are of three types – (1) Consolidated Fund, (2) Contingent Fund and, (3) Public Account
Now,
(1) Consolidated fund: Regarded as the chief account where there is accumulation of revenues from different taxes, non-tax revenues and, govt. loans as well as receipts on loan repayments. Any release of fund from this a/c needs prior approval of the Parliament/ State Assembly.
(2) Contingent fund: Regarded as supportive a/c from where fund can be released temporarily to meet some unforeseen expenditures, which are otherwise met from the Consolidated a/c, with consent of the President. When approval is obtained from the Parliament at the subsequent stage, the amount of money utilized from this a/c on urgent basis is refunded to it from the Consolidated a/c. Contingent a/c may be considered as buffer a/c or standby a/c used on temporary basis in the hour of extreme need.
(3) Public a/c: All the public money (other than those in Consolidated a/c) received by the Govt. in the mode of small savings, provident funds, insurances etc. accumulate to this a/c. For transaction in this a/c no authorisation is required from the Parliament.
So, all the “govt. employees” get salary from the Consolidated fund of the Govt. This is not the case of PSU employees in respect of whom salaries are debited to the funds other than the consolidated fund.
Foreign service: Employment in PSUs/Autonomous Bodies etc. i.e. outside the govt. employment where salary of employees is debited to the govt. funds other than the consolidated fund of the Govt. This is basically a relative term used to mean transefer of service from Govt. to PSU/Autonomous Body and, not from one Govt. deptt. to another Govt. deptt.
Employees of Govt. Companies like SAIL, GAIL etc. are not civil servants as these commercial/business units of govt. are formed under Company Act and, funded by both govt. and private. Basically, employees of these companies are not involved in either essential or utility public services like other PSUs. These units are deemed to be Pvt. Companies running under govt. control.

No, all the PSUs are not Autonomous Bodies. The Autonomous Bodies enjoy autonomy in respect of their internal administration/management which is free from govt. control. All the non-profitable Autonomous Bodies are financed wholly or substantially (>50% of expenditure) from the cess or the govt. grants. It mainly includes Govt. Statutory Bodies, Govt. Universities, Scientific Research institutes, Agricultural Research Institutes etc. . On the other hand, Nationalised Banks, RBI, SBI, LICI, National Insurance Co.Ltd., New India Assurance Co. etc. are profit-making Autonomous Bodies.

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