Sectors in indian economy public and private economics essay
Role of public sector in economic development ppt
Such a big sector is completely owned and managed by the private sector. But in India, under the conditions of shortage, price controls, dual pricing etc. Government of India is working to remove many trade barriers to services and tabled a draft legal text on Trade Facilitation in Services to the WTO in Considering the importance of the private sector, the Government has been undertaking various supporting measures for promotion and development of this sector. At present, the organised areas of the private sector is mostly controlled by the corporate industrial sector and the unorganised agricultural and cottage industrial sector are controlled by the household sector and private individuals. After independence, the national government gave sufficient stress on industrialization. Growth needs to be more inclusive Broadening its tax base should enable India to make much-needed progress in increasing the inclusivity of its economic growth. It was only since the Sixth Plan, the Government started to assign much responsibility to the private sector by allocating about 47 per cent of the total planned investment in the private sector. A total of 11 projects worth Rs Accordingly, the net profit to turnover ratio of these total Indian private sector enterprises declined from 6. Essay on the Role of Private Sector in India: While in various Western capitalist countries and in Japan, private sector played a responsible role for their economic development but in socialist countries, public sector played a dominant role for their industrial development.
Thus, even after making a huge volume of investments in the public sector and completing more than 45 years of planning, Indian economy is still broadly based on the private sector.
The importance of this sector in the economy of the country can be visualised from the fact that it contributes to the major portion of national income and employment. These houses have gained the control over huge volume of wealth and economic power.
Role of public sector in business environment
Moreover, in respect of international trade, the private sector is playing an important role in its promotion through active government support. The employment generation part is not growing its importance in the service sector. The private sector also made a serious attempt to invest on industries producing wide range of intermediate products which include machine tools, chemicals, paints, plastic, ferrous and non-ferrous metals, automobiles, electronics and electrical goods etc. A recent McKinsey report reckons that within a few years, up to half of the 3. Government by reserving most of the priority areas for the public sector has restricted the operation of the private sector and also helped the private sector indirectly to increase the production of non-essential goods. In this way, long term requirements of the economy are being ignored deliberately and the required development of the essential sectors has been hampered. India also has scope to build on its tech start-up scene, which already boasts more companies than anywhere other than the US and UK. Thus, this is quite a challenging situation before the private sector of the country. This sector is responsible for the employment of almost 14 percent of the entire workforce currently working in India. But India, being a mixed economy, adopted a middle course where it has judicially mixed both the public sector and private sector for their respective role in development activities of the country. As the private sector is mostly guided by the profit maximisation motive for the owners and have little consideration for the national objectives and priorities, thus it may adopt certain undesirable steps which may go against the interest of the consumers as well as the nation itself. But for the proper development of the small sector, modernization of their production techniques, proper product-mix, updating of designs must be given adequate priority. As per the study made by the Mahalanobis Committee and the Monopolies Inquiry Commission, it is found that planning process of the country has increased the monopoly and economic concentration instead of reducing such trend.
These measures include both credit and non-credit measures. The following are some of the important weaknesses and limitations of the private sector: i Too Much Emphasis on Low-Priority Industries: The first important limitation of the private sector in India is that during the last four decades it has invested most of its capital on the development and expansion of consumer goods industries, having low priority elitist bias, like Television and other electronics, man-made fibres, refrigerators, automobiles, perfumes and cosmetics, air conditioners etc.
The entire small scale and cottage industry is owned and managed by the private sector.
Related posts:. Moreover, all the professional services like doctors, engineers, teachers, lawyers etc. The country scored well in the Inclusive Development Index on access to finance for business development.
Considering the importance of the private sector, the Government has been undertaking various supporting measures for promotion and development of this sector. As we have the clear idea of this sector is, the best example to discuss in this sector is the agriculture sector.
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