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Public Sector, Private Sector and Global Enterprises — OCM STD 11 Commerce — Question

Gujarat BoardEnglish MediumSTD 11 CommerceOCMPublic Sector, Private Sector and Global Enterprises5 Marks
Question
Explain advantages / Importance of Public Sector.
✓

Answer

  • Introduction :
    • Our country has adopted mixed economy for economic development.
    • There is combination of public sector and private sector's business units in mixed economy.
    • Government of India had accepted public sector in industrial policy 1956 to develop industrialization. It was emphasized in five year plan also.
    • Original objective of public sector is to create infrastructure for development of economy.
    • Its aim is to develop key industries.
  • Characteristics of Public Sector : They are as under.
    • Establishment of basic industries :
  • The base of fast development of a country is industrialization.
  • Huge capital investment is needed in basic industries.
  • It is difficult through private sector, so government adopted the concept of the establishment of basic industries.
    • Elimination of Monopoly :
  • Government is an owner of the public sector industries.
  • So monopoly and exploitation of customers are removed.
    • Balanced Regional Industrial Development :
  • Private sector industries are not established in backward or under-developed areas of the country.
  • Government establishes industries in these parts of the nation.
  • As a result, we see balanced industrial development throughout the nation. e.g. Bokaro Steel Plants, Bhilai and Rourkela Steel Plants.
    • Objective of Social welfare :
  • Public sector units without any discrimination, provide service to all sectors of society at low price.
  • Besides this, social welfare is given more importance in business activities.
    • Low Level of Profit :
  • Public sector units provide services at very low rate and earns very less profit.
  • Sometimes government bears loss also.
  • In new industrial policy, declared in 1991 normal profit is expected from public sector companies.
    • Maintenance of national interest :
  • Public sector units, keeping in view national interest manufacture defense weapons.
    • Creation of employment opportunity :
  • Government invests huge capital in public sector units. As a result ancillary units develop and more job opportunities are created.
    • Ideal salary and facilities :
  • Government owns public sector units.
  • Their employees get salary and facilities as per government norms and rules which are ideal and much higher than that those of private sector.
    • Social economic Justice :
  • Public sector units provide service to weaker section of society without taking any charge or with very little charge or subsidized rates.
  • It provides job priority to women also.
  • These units totally follow the labour laws so people get social and economic justice.
    • Increase Economic Development of the Country :
  • Public sector industries create basic infrastructure.
  • Public sectors have started developing backward areas.
  • As a result nation's economic progress grows.
  • Conclusion
    • Public enterprises have played vital role in economic development of the country.
    • It has created basic infrastructure for industries.
    • Public sector units manufacture defense weapons for safety and security of the nation.

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