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WHAT IS THE MOTIVE OF PUBLIC SECTOR ENTERPRISE?
 1. Economic development:

Public enterprises were set up to accelerate the rate of economic growth in a planned manner. These enterprises have created a sound industrial base for rapid industrialisation of the country.

They are expected to provide infrastructure facilities for promot­ing balanced and diversified economic structure of development.

2. Self-reliance:

Another aim of public enterprises is to promote self-reliance in strategic sectors of the national economy. For this purpose, public enterprises have been set up in transpor­tation, communication, energy, petro-chemicals, and other key and basic industries.

3. Development of backward Areas:

Several public enterprises were established in back­ward areas to reduce regional imbalances in development. Balanced development of different parts of the country is necessary for social as well as strategic reasons.

4. Employment generation:

Unemployment has become a serious problem in India. Public enterprises seek to offer gainful employment to millions. In order to protect jobs, several sick units in the private sector have been nationalised.

5. Economic surplus:

Public enterprises seek to generate and mobilise surplus for reinvest­ment. These enterprises earn money and mobilise public savings for industrial development.

6. Egalitarian society:

An important objective of public enterprises is to prevent concentra­tion of economic power and growth of private monopolies. Public sector helps the Government to enforce social control on trade and industry for ensuring equitable distribution of goods and services. Public enterprises protect and promote small scale industries.

7. Consumer welfare:

Public enterprises seek to protect consumers from exploitation and profiteering by ensuring supply of essential commodities at cheaper prices. They aim at stabilising prices.

8. Public utilities:

Private sector is guided by profit motive. Therefore, it is reluctant to invest money in public utility services like water supply, gas, electricity, public transport. There­fore, the Government has to assume responsibility for providing such services.

9. Defence:

Government has to set up public enterprises for production of defence equip­ment. Supply of such equipment cannot be entrusted for private sector due to the need for utmost secrecy.

10. Labour welfare:

Public enterprises serve as model employers. They ensure welfare and social security of employees. Many public enterprises have developed townships, schools, col­lege and hospitals for their workers.


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