Public, Private, Joint and Co-operative Sectors CoThe mixed economy of India is characterised by the co-existance of public, private,

joint and co-operative sectors. Imperative of Public Sectors : Policy on the public sector has been guided by the Industrial Policy Resolutions 1956 & 1991 which gave the public sector a strategic role in the economy. At the time of Indias independence in 1947, there were various problems confronting the country which needed to be tackled in a planned and systematic manner. India was basically an agrarian economy with a weak industrial base, low level of savings and investment and near absence of infrastructural facilities.

Public, Private, Joint and Co-operative Sectors CoA vast percentage of population was extremely poor. There existed considerable inequalities in income, low level of employment opportunities, serious regional imbalances in economic attainments and lack of trained man-power in various fields of management. It was, thus, obvious that if the country was to speed up its economic growth and maintain it in the long run at a steady level, a big push was required. As such, States intervention in all the sectors of the economy, was inevitable because private sector had neither the necessary resources in terms of funds, managerial and scientific skill, nor the will to undertake risks involved in large long-gestation investments. Among the imperatives were removal of regional, imbalances, accelerated growth of agricultural and industrial production, better utilisation of natural resources and a wider ownership of economic power to prevent its concentration in a few hands. Given the type and range of problems faced by the country on its

Public, Private, Joint and Co-operative Sectors Coeconomic, social and strategic fronts and the various imperatives, it became a pragmatic compulsion to deploy the public sector as an instrument for self-reliant economic growth so as to develop a sound agricultural and industrial base, diversify the public economy and overcome the economic and social backwardness. The predominant considerations for continued large investments in public sector enterprises were to accelerate the growth of core sectors of economy; to serve the equipment needs of strategically important sectors like Railways, Telecommunications, Nuclear Power, Defence, etc., to enable the Government to exert superceding power on the operation of private monopolies and multinationals in selected areas and to provide a springboard for the economy to achieve a significant degree of self-sufficiency in the critical sectors. Another category of public enterprises concerns essentially the consumer oriented industries such as drugs, hotels, food industries, etc.

Public, Private, Joint and Co-operative Sectors CoThe reason for setting up such enterprises was to ensure easier available of vital articles of mass consumption, to introduce check on prices of important produces and services and to help promote emerging areas like tourism, etc. Then, again, a large number of enterprises belong to the category of sick units taken over from the private sector in order to sustain production and protect employment.There are a number of public enterprises operating production and protect employment. There are a number of public enterprises operating in national and international trade, consultancy, contract and construction services, inland and overseas communications, etc. The overall profile of public sector enterprises in India is, thus, a heterogenous conglomerate of basic and infrastructural industries, industries producing consumer goods and industries engaged in trade and services, etc.

Objectives of Public Sector

1)

2) 3) 4) 5) 6) 7)

To help in the rapid economic growth and industrialisation of the country and create the necessary infrastructure for economic development. To earn return on investment and thus then generate resources for development. To promote redistribution of income and wealth. To create employment opportunities. To promote balanced regional development. To assist the development of small scale and ancilliary industries. To promote import substitution, save and earn foreign exchange for the economy.

Growth and Performance of Public Enterprises

There had been a phenomenal growth of public sector since the commencement of planning. Public Sector was assigned an important role in the industrialisation and economic development of the country.The Industrial Policy Resolution of 1948 made it very clear that the manufacturer of arms and ammunition, production and control of atomic energy, ownership and management of railway transport would be exclusive monopoly of central government. Further it was resolved that another six industries the state alone would setup new undertakings. They were : Coal, Iron and Steel, Aircraft Manufacture, Ship Building, Manufacturer of Telephone, Telegraph and Wireless Operators. Under these Industrial Policies government setup some public sector enterprises which are called the pillers of Indian economy.They were also called as Navarathnas.

Growth and Performance of Public Enterprises

They are : 1) IOCL Indian Oil Corporation Limited (It was ranked 135 in Fortunes global 500A (2007), 2) BPCL - Bharat Petroleum Corporation Limited 3) HPCL Hindusthan Petroleum Corporation Limited 4) ONGC Oil and Natural Gas Corporation Limited (Oil exploration and crude oil producing company) 5) SAIL Steel Authority of India Limited (Indias largest integrated steel producer) 6) IPCL Indian Petrochemicals Corporation Limited 7) BHEL Bharat Heavy Electricals Limited (Biggest power equipment manufacturer in India) 8) NTPC National Thermal Power Corporation (which produces about 1/4th of power generated in India

Growth and Performance of Public Enterprises

9) VSNL Videsh Sanchar Nigam Limited (Sole provider of International Telephone Services in India)

Public Enterprises is constrained by the following factors

1) Public sector enterprises were setup not only for commercial consideration but also for factors such as generation of employment, promoting balanced regional development 2) Low return of investment on account of price constraints imposed on certain infrastructural goods and services of public enteprises. 3) A number of sick units in the private sector facing closure had to be taken over by the Govt. and these units formed sizeable part of central public sector. 4) Number of industries promoted in the public sector with long gestation period. 5) The impact of escalation in the prices of various inputs and periodical wage revision. These factors were straining the treasury of the country.

Performance of Public Enterprises

Therefore new industrial policy indicated that the public sector would withdraw from the following cases : 1) Industries based on low technology 2) Small scale and non-strategic areas 3) Inefficient and unproductive areas 4) Areas with low or zero social responsibility 5) Areas where private sector has developed sufficient enterprise and resources. And started concentrating on bringing down 1) Bringing down Government equity in all non-strategic public sector undertakings. 2) Re-structure and revive potentially viable PSUs (Public Sector Undertakings)

Growth and Performance of Public Enterprises

3) Closed on PSUs which cannot be revived. 4) Fully protected the interest of workers.

Private Sector
In a mixed economy, the private sector too has an important role to play.The Industrial policy resolution 1956 had made it very clear that private sector will also have the opportunity to development and expand. The policy of the state was to encourage the development of industries in the private sector in accordance with the programs formulated in successive five year plans. By ensuring the development of transport, power and other services. And by appropriate budget allotment. Government decided that for both private and publicly owned units, it would continue to give its support which is fair and nondiscriminatory to both of them.

Joint Sectors
The term joint sectors refers to the enterprise owned and managed jointly by the private sector and government (public undertakings). The main objectives of joint sectors are: 1) To decrease the concentration of economic power. 2) Social control of industry, 3) Acceleration of economic development 4) Promotion of mixed economy 5) Broad base of entrepreneurship.

CoCo-operative Sector
In India the cooperative sector has been assigned an important role in the development of many sectors. In the first five year plan it undertook areas like agricultural, rural and small scale industries, retail distribution, housing.The important objectives of the cooperative sector area : 1) Prevention of concentration of economic power 2) Wider disbursal of ownership of productive resources 3) Active involvement of people in the development programs 4) Speedier economic development 5) Liquidation of unemployment and poverty.

CoCo-operative Sector
The factors which lead to the relationship between the state and cooperatives are : 1) Need to give legal recognition to cooperative societies and to provide proper management and supervision in the interest of the movement 2) The need to safeguard the rights of the people (society) 3) Need to prevent any abuse to cooperatives 4) Need to promote the movement because nobody other than government will initiate promotion.This was the best means of national development. It solves the problem of lack of leadership and local personnel for the diffusion of new ideas and techniques.

CoCo-operative Sector
Problems : 1) There are wide regional disparities, the level of development of agricultural cooperatives is not uniform in all states. 2) Many co-operative societies are virtually out of use. 3) Many others are suffering due to financial, organisational and administrative problems. 4) The co-operative movement in India is very adversely affected by political overshadowing. 5) Many co-operatives are controlled by politicians or the economically powerful members.