Public sector in India, evaluation of public sector

public sector in India

1. Public sector in india

2. Meaning of public enterprise Public enterprise refers to that industrial institution which is owned, managed and controlled by the government. In these companies the direct holding of the central government is 51% or more. Some of the public sectors in India are ─ Bharat electronics limited. Bharat petro resources. Air india limited.

3. Definition of public enterprise “Public enterprises are industrial, commercial and economic activities carried on by the central government or by the state government or jointly by the central and the state government.” ─ S.H. Khera

4. Role or significance of public enterprises/public sector Following points may be noted to explain the increasing role of public sector in the Indian economy─ Capital formation─ plan Public sector (in percent) First plan Second plan Third plan Ninth plan Tenth plan Eleventh plan 46 54 63 33 24 21.9

5. Contribution to gross domestic product: Export promotion: In year 2014-15,export earnings of public sector were 1,03,071 crore . Promote employment: On march 2012, public sector enterprises offered employment to 176.1 lakh people. Foreign reserves: The foreign reserves of public sector enterprises was $362.79 billion on 10 February 2017 year GDP 1992-93 2012-13 14% 20.4%

6. Basic industries. Development of infrastructure. Import substitution. Less regional disparities. Socialistic pattern of society. Resources for economic development. Growth of ancillary industrial units. Rehabilitation of sick units. Helps in raising per capita income.

7. Evaluation of public sector enterprises Profitability of public sector enterprises : particulars 1980-81 2000-01 2010-11 2013-14 2014-15 Investment(in rupee crore) Net profit after tax(in rupee crore) Percentage of profit (after tax) on capital employed 18,207 (−)203 (−)1.1 3,31,372 15,653 4.72 9,49,499 92,077 9.70 17,44,321 1,29,109 7.40 18,34,050 1,03,003 5.62

8. Main defects of public sector enterprises: Lack of efficiency. Lack of good management. Social objectives. Long gestation period. More construction expenditure. Industrial disputes. Effect of location. Lack of competition. Irresponsible staff. Under utilization of production capacity. High capital output ratio. Over staffing. Over capitalization.

9. conclusion The public sector in spite of its defects is a driving force for private sector in India because it’s the public sector that takes initiative to develop infrastructure. There have been declines in the performance of public sector companies but we should never forget they provide the foundations to the private sector.

10. Thank you