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PUBLIC SECTOR

BY :
ANIRUDH
JAIN
X-E
ROLLNO.7

Introduction
The part of theeconomyconcerned with providing
basic governmentservices. Thecomposition of
thepublic sectorvaries bycountry, but in most
countries the public sector includes such services
as the police, military, public roads, public
transit,primaryeducation and healthcare for the
poor. The public sector might provide services
that non-payer cannot be excluded from (such as
street lighting), services whichbenefitall of
society rather than just
theindividualwhousestheservice(such as public
education), and services that encourage equal
opportunity.

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 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.
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 and


Private Sector in Capital Formation
Plan

Public Sector
(in per cent)

Private Sector
(in per cent)

First Plan

46

54

Second Plan

54

46

Third Plan

63

37

Fourth Plan

61

39

Fifth Plan

58

42

Sixth Plan

53

47

Seventh Plan

48

52

Eighth Plan

45

55

Ninth Plan

33

67

Tenth Plan

24

76

Eleventh (2007-12)

22

78

Significance of Public Sector


Employment Generation
Capital Formation
Share in GDP
Infrastructure development
Strong industrial base
Export promotion
Import substitution
Removal of regional disparities
Raising internal resources
Growth of ancillary industries
Social welfare
Competition to private 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
Industrial disputes
Wrong pricing policies

Problems in Pubic Sector


Political interference and corruption
Obsolete technology
Over-capitalization

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
Granting autonomy
Regular inspection and auditing
Reforms in labour policy

Suggestions for the improvement of Public Sector


Increase in efficiency
Reforming pricing policies
Voluntary retirement Scheme
Use of sophisticated technology
Revival of PSUs
Memorandum of understanding (MOU)

Types of Unemployment
Frictional unemployment
Structural unemployment
Cyclical or Keynesian

unemployment
Seasonal unemployment

Frictional
unemployment
Frictional unemployment occurs when a
worker moves from one job to another. It is a
result of imperfect information in the labor
market, because if job seekers knew that they
would be employed for a particular job
vacancy, almost no time would be lost in
getting a new job, eliminating this form of
unemployment.

Structural unemployment
Structural unemployment arises when the

qualification of a person is not enough to


meet his job responsibilities. Conversely,
structural unemployment arises when the
salary offered to a person falls short of the
minimum wage that can be paid for the
concerned job.

Cyclical unemployment

Cyclical or demand deficient unemployment occurs


when the economy is in need of low workforce. The
demand for labor increases with the economy in the
growth phase. Again, when the economy passes
through depression, demand for labor decreases and
the extra workers are released as the unemployed
abor force.

Seasonal Unemployment

Seasonal unemployment

occurs when an occupation


is not in demand at certain
seasons.

Causes of unemployment
High Population growth.
Absence of employment opportunities.
Seasonal Employment.
Joint Family System.
Increasing turnout of students from Indian

Universities.
Slow Developing of Industries.
Insufficient Rate of Economic Progress.

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 PSUs work more efficiently
rather than reducing public ownership
in the economy.

THANK YOU!

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