BY BASANTI BANRA MANJEET KAUR

PUBLIC SECTOR
INTRODUCTION The part of the economy concerned with providing basic government services. The composition of the public sector includes such services s the police, military, public roads, public transit, primary education and health care for the poor. The public sector might provide services that nonpayer cannot be excluded from (such as street lighting)or services which benefit all of society rather than just the individual who use the services that encourage equal opportunity.

OBJECTIVE OF THE PUBLIC SECTOR

To impetus the economic growth and to boost

industrialization in the country. To develop infrastructure. To develop strategically important area in the interest of nation as railways, telecommunication, nuclear power, defense etc. To check the concentration of economic power. To promote redistribution of income and wealth. To create employment opportunities.

Cont..
To have a balanced regional development if country.

To produce import substitutes.

To invest in those area where private investors are not

ready to invest. To ensure easy availability of articles of mass consumption, to check prices of important articles etc. To utilize the natural resources of country in national interest.
2

ROLE OF PUBLIC SECTOR IN THE INDIAN ECONOMY

Capital formation Employment Share of Public Sector in GDP Development of Infrastructure Strong Industrial Base Export Promotion Import Substitution Removal of Regional Disparities Raising Internal Resources Contributor to Exchequer Reducing Inequalities in Economy.

PERCENTAGE OF PUBLIC AND PRIVATE SECTOR IN CAPTICAL FORMATION

PLAN FIRST YEAR SECOND YEAR PUBLIC SECTOR(IN %) 46 54 PRIVATE SECTOR (IN%) 54 46

THIRD YEAR
FOURTH YEAR FIVETH YEAR SIX YEAR SEVETH YEAR EIGHT YEAR NINTH YEAR TENTH YEAR ELEVENTH YEAR(2007-12)

63
61 58 53 48 45 33 24 22

37
39 47 47 52 55 67 76 78

REASONS FOR LOSSES IN PSUS.

Objectives Frequent changes in management

Selection of long sites

Nationalization of loss making units Autonomy

POLICY REGARDING PSU IN ERA OF LIBERLIZATION

Reduction in the reserved items

Memorandum of understanding(MOU)
Referring to BIFR National renewal fund(NRF) Privatization/Disinvestment

POLICY FOR NAVRATNAS

To incur all capital expenditure without any monetary

ceiling. To raise debt from the domestic or international markets. To enter into technology joint ventures and wholly owned subsidiaries with equity investment up to Rs.200 crore. To effect organizational restructuring including establishment of profit centers, opening of offices in India and abroad. To structure and implement scheme relating to human resources management and personal.

PRIVATE SECTOR IN INDIA

The

industrial sector includes manufacturing, mining and quarrying, gas, water supply and construction. Private sector always had a dominant share in GDP. The government policy of encouraging the public sector led to a decline in the share of the private sector from 85% in 60s to 66% in 90s. But with the renewed focus on private sector in 90s, the contribution to industrial GDP increased to 67% in 1990H2.

MANUFACTURING:
The share of private sector in investment in

manufacturing sector increased from 80.4% in 1980 to 93.3% in 1990H2.

During 1993-94 to 1996-97 when the economy

was booming, the private sector GDP growth was in double digits and higher than public sector.

SERVICES:
The service sector GDP grew at 7-8% per annum and

increased its share in overall GDP from 41% in 1990-91 to almost 59% by 1999-00.

During 1990s, both private and public sector increased

their growth performance over the earlier period with private sector GDP growing faster than public sector GDP in 1990H1. was particularly buoyant in the financial sector, transport(without railways) and community and social services.

Within services, the private sector GDP growth during 90s

BANKING AND INSURANCE

GDP in banking and insurance clocked double-

digit growth rates in the nineties.

The share of private sector in total investment in

banking and insurance went up from 36% in 1980s to almost 70% in 1990H2.

TRANSPORT(other than railways)

This sector had a dominant private sector presence

but the share private sector in GDP had fallen from 72%(1960) to 69% (1980).
But in 90s this trend was reversed, not only the

share of private sector go up from 74% to 83% in 1990s, its share in GDP also increased from 70% to 77% in the corresponding period.

COMMUNITY AND SOCIAL SERVICES

It includes health, education and variety of personal

services. The share of private sector in GDP had come down from 83% in1960s to 61% in the 1990H1. PS increased their investment from 51% to 65% in 1990H1. and 72% in 1990H2. the increased investment share of private sector in the first half did not translate into higher growth but in the second half witnessed a pick up in the private sector GDP growth(8.7%).

THANK YOU