Since independence, the Indian government made sustained efforts to bring about balanced development by setting up public sector enterprises. The role of these PSEs was earlier limited to basic, heavy and core industries. Furthermore the government had to setup huge PSEs for the development of the nation.
The public sector banks which have played an important role in shaping up the Indian economy since the pre-independence period until now continue to dominate the Indian banking industry, accounting for more than 70% share of total banking business in India. With the introduction of new economic policy the government of India adapted a more open economy with greater reliance on market forces and a larger role of the private sector including foreign investment. To sustain in this competitive era PSEs have undertaken several steps such as focusing on improving productivity, giving performance related pay, offering additional welfare facilities and increasing marketing efforts.