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  • Category: Miscellaneous

    Why cannot Government start profitable companies in every sector?

    In India the present situarion is Government is there only in strategic sectors like Space, Banking, Telecom. In vast reaminder of sectors Government just plays a regulator role. Why not we have Government companies in very sector. For eg. Government can run companies in automobiles, Steel, Chemicals, run stationery shops etc. just like any other company. The profit out of these can be added to the treasury. I am not saying about Governmentisation of economy. But Government also beiny a player on private economy. This boosts competition, gives employment, raises revenue of Government.
  • #618273
    The term 'profit' is related to business. It is not Government's duty to engage itself in business activities. Government shoudld engage itself only in those sectors where gestation period is high or in those sectors where infrastructural development is required. Otherwise, Government must not try profit-making. The Indian Government has learnt this truth by its activities related to PSUs during fifties, sixties and seventies.
    Caution: Explosive. Handle with care.

  • #618277
    There are some Public Secor Units that are being run by the Government. Even there are some state government-run companies.All these companies are started in Public Sector. Many of those units are not able to sustain on their own. How much they are earning is less than their expenses. They have to get funds from the government. How long government will support the business. There is a very big difference between the management by government and the management by the private sector. The belongingness is very high in private concerns. In every activity, there will be a responsible person and he is to explain the reasons for any losses. So people will work with more care. But in public sector, this is not there. The cost of production will be very high in the Public organisation than in private Organisation. That is why these days governments are not encouraging these units in public sector.
    drrao
    always confident

  • #618286
    I would say, the Government should make existing industries profitable, if not privatization that is already in the picture will takeover many parts of the public sector units if not all.The Government cannot be a major player in all sectors but at least it can be a key player in the sector. I think we should seriously think about making existing industries under the government lucrative. For instance, we grew up knowing about HMT as the major watchmaker, today it's long gone.Similar many of the giants in each sector that had monopoly, now have to compete with others for a market share. We dislike the private sector but at the same time accept that there are more productive or cost-effective.In today's world financial viability is integral to the outlook and future of the government sector because if it is not viable financially, it would be overrun or sadly closed down giving way to other players.

  • #618292
    Government should involve when the product is an essential one and if left to the private sector fully, the people will be exploited and fleeced mercilessly. In such cases government need not make profit also. Government should have its hand and involvement in core sectors and sectors that have impact on nation's security.

    There is nothing wrong if the government enters tourism and hospitality sector and runs profitable ventures simultaneously being affordable also. However I do not approve the government involving in the liquor business and the like.


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