Importance of Public Sector
Posted Date: 24-Aug-2010
Mohammed Julfekar Haider
This resource gives information about the importance of public sector.
Public sector plays a vital role in the development of any economy. Public sector being the monopoly in the hands of government is considered to be very important organization. It has following importance:-
(1) Economic Development:
Economic development mainly depends upon industrial development. Heavy & basic industries like iron & steel, shipping, mining, etc. are required for supplying raw materials to small industries. Huge capital is required for establishment of such heavy & basic industries. This capital required for these industries is easily & readily made available by public sector but it is practically not possible for a private sector to run these industries.
(2) Regional Development:
Private sector usually neglect backward area. But public sector organizations set up their units in economically backward areas. By this public sector removes regional imbalance & brings regional development.
Various public sectors operating in India needs lot of manpower & this provide employment to unlimited individuals according to their education, experience & abilities.
(4) Service Motive:
Public sector organizations are working with the only motive of providing public utility services to society at large irrespective of profit.
Public sector is purely government monopoly. It does not face any type of competition from any private sector. Public sector is working on monopoly, semi-monopoly or oligopoly basis.
(6) Sound Infrastructure:
Rapid industrial growth in a country needs sound infrastructure. Infrastructural industries require huge capital for construction of Roads, Railways, Electricity & many such industries. Private sector is unable to have such huge capital & that also without any high return but public sector can easily afford to provide all infrastructural facilities.
(7) Modal Employer:
Like a good parent, public sector is very much concerned with its employees. It take proper care of its employees & provides job security, sound wages, proper working conditions, training and welfare facilities.
(8) Protection to Sick Industries:
Public sector, to prevent sick unit closing down, takes over their responsibility & prevent many people from getting unemployed not only this but it prevents unnecessary locking of capital, land, building, machinery, etc.
(9) Government Control:
Public sector is wholly controlled & managed by the Board of Directors or other officers appointed by government.
(10) Economies of Operation:
Public sector due to its large scale operations enjoys economies of large scale operation.
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