PUBLIC SECTOR : PUBLIC SECTOR By: Kulwinder Kaur,
Parvesh Tulseja Introduction : Introduction The part of the economy concerned with providing basic government services. The composition of the public sector varies by country, but in most countries the public sector includes such services as the police, military, public roads, public transit, primary education and healthcare for the poor. The public sector might provide services that non-payer cannot be excluded from (such as street lighting), services which benefit all of society rather than just the individual who uses the service(such as public education), and services that encourage equal opportunity. Objectives of public sector : Objectives of public sector To accelerate the industrial growth and development of the economy.
To build up a strong infrastructure for supporting economic growth and development of the country.
To provide competition to the private sector for welfare of the state and the public at large.
To generate employment and strive for removal of poverty.
To make investment in order to fill the gap between savings and investment.
To promote balanced and comprehensive economic growth of the country. Objectives of public sector : Objectives of public sector To redistribute income and wealth in order to remove inequalities in society.
To make investment in those areas where the private sector is not willing to invest.
To promote the development of small and ancillary industries.
To focus on increasing exports of the country for earning foreign exchange and also to enter sectors where imports can be substituted by products made in India.
To help the govt in implementation of economic policies and achieving objectives of five year plans.
To eliminate monopolies and prevent monopolistic practices. Percentage Share of Public andPrivate Sector in Capital Formation : Percentage Share of Public andPrivate Sector in Capital Formation Significance of Public Sector : Significance of Public Sector Employment Generation
Share in GDP
Strong industrial base
Removal of regional disparities
Raising internal resources
Growth of ancillary industries
Competition to private sector Problems in Pubic Sector : Problems in Pubic Sector Social welfare rather than profit maximization
Lack of good management
Lack of autonomy to make decisions regarding their own growth and development
Over-staffing and inefficiency of employees
Under-utilization of production capacity
Wrong pricing policies Problems in Pubic Sector : Problems in Pubic Sector Political interference and corruption
Over-capitalization Suggestions for the improvement of Public Sector : Suggestions for the improvement of Public Sector Suitable reforms in the board of directors. Politicians should not be appointed as directors of these boards.
Control over political interference
Appointment and selection of efficient employees
Regular inspection and auditing
Reforms in labour policy Suggestions for the improvement of Public Sector : Suggestions for the improvement of Public Sector Increase in efficiency
Reforming pricing policies
Voluntary retirement Scheme
Use of sophisticated technology
Revival of PSU’s
Memorandum of understanding (MOU) Conclusion : Conclusion The disinvestment programme has been carried out by the government in a hasty manner. The outcome of privatization so far as has been pathetic. The stress should be on making PSU’s work more efficiently rather than reducing public ownership in the economy. THANK YOU : THANK YOU