The public sector was given a leading role in the industrial development during the planning period since the private sector lacked either the will or the resources to take up investment in a sector which was completely untouched. There were several such industries which had to be developed very rapidly to ensure economic development but it was not within the capacity of the private sector to develop them. For example, heavy and basic industries, which require a lot of capital and have a longer gestation period.
To prevent concentration of economic wealth and power, it was essential that public sector be given a leading role in the industrial development of the country.
The usefulness of public sector in the development of an economy can be justified on the following grounds:

1. There is a large area of development which is either beyond the capacity of the private sector or is not profitable enough, like development of essential infrastructure.
2. Those projects which have a long gestation period.
3. Those which require large capital for investment that the private sector lacks.
4. Those products where strategic considerations predominate such as defence equipment, nuclear research, etc.