The public sector consists of those business enterprises which are owned and managed by the government. It can be either wholly owned by the government or wholly-owned by one or more State Governments, or partially by both the governments. It must be having a paid-up capital of at least 51%. The different kinds of organizations that come under the public sector are:

a. Departmental Undertaking: The departmental undertaking is the oldest form of public Enterprise. They are set up as departments of the ministry and an extension of the ministry as well. They are controlled by the minister of the concerned department and is managed by the government official. For example the railway department, telegraph department.

b. Statutory corporation: It is a public enterprise which is brought into existence by a special act of the Parliament. It is a financial independent body with his own legal existence. It has specific control over a specified area or a type of commercial act.

c. Government company: According to Section 2(45) of the Companies Act 2013, a government company is a company in which the paid-up capital held by the government is not less than 51%. This paid-up capital is held by the Central Government or by any State government or partly by both of them.