Abstract
The beginning of the year 2002 has seen some concrete reform measures concerning the state- level public sector enterprises (PSEs) in Karnataka. One of the interesting features of this new initiative is to identify enterprises for privatisation not through the measurement of profit but on the basis of the kind of activity that the unit is engaged in (commercial/non-commercial etc.).This paper reviews the status of the PSEs in the State of Karnataka, the recent restructuring measures initiated by the State Government and the issues emerged thereby.