How are the public sector enterprises helping in the balanced development of the Indian Economy and promoting public welfare in the country?
Answers
The public sector has been assigned the important role of achieving one national objective of
economic growth with social justice, generating larger social gains and strengthening country’s
economy by strengthening country’s economy by removing regional disparities and promoting
balanced development in different parts of the country.
The impact of public sector undertakings on the regional development may be assessed in terms
of two different components, viz. (A) Direct Impact and (B) Indirect Impact.
The direct impact is mainly in terms of the demand for men and materials unit and the value
added which is its contribution to the regional as well as national income. The indirect impact
may further be classified into two categories, viz. (B1) Multiplier Effects and (B2) Propulsive
Effects.
The multiplier effects occur in terms of the increased incomes of the direct beneficiaries of the
unit. The propulsive effects of the units would be in terms of generation of activity in the
industries linked to the public sector either as supplier of inputs or consumers of outputs.
Public sector enterprises have rendered useful help and service in the development of human
resource in backward areas for changing the traditional character of village life. Investment in
human capital is considered an essential ingredient of development planning. Such development
is only possible if rural talents are identified properly fed with modern knowledge of relevant
science and technology.
A large number of public sector undertakings have been set up in the backward
areas/regions/districts in order to capitalise the rural labour by equipping them with vocational
education, technical training and managerial skills. The strategy behind this is to transform the
unemployed rural people to get self-motivated and self-inspired employment avenues in local
economic activities.
Public sector undertakings working as a vehicle of communication have taken the new
knowledge to villages and acted as “change agents” for introducing changes in existing
practices, initiating commercial use of appropriate village technologies in agriculture and allied
activities, village artisan and handicrafts and local village industry by inducing use of
productivity enhancing equipment and light machinery. Apart from the above, a number of
public sector undertakings have been taking special interest in setting up community
development centres to discharge their social responsibility.
Improvement in economic infrastructure in the backward areas can be provided through the help
and active participation of the public sector undertakings. This should broadly cover
constructing or improving existing link roads and inside roads in villages to make these
accessible by modern means of transport; ensuring that each village is equipped with electricity
and power for domestic as well as commercial and industrial use.
Indian public sector constitutes the core of the economy’s social and economic development
history, since the dawn of Independence in 1947. Rightly, this sector is described as an engine
of rural development and social welfare. The enterprises of public sector are unique, when
compared to their counterpart in private sector in the sense that the former have to bear greater
social obligation apart from displaying good performance to secure reasonable profits, which
being the all important concern of the private enterprises.
The public sector undertakings emerge very significant in the Indian context by fulfilling
various social obligations such as generation of employment for mass, provision of basic
infrastructure and public utilities, protecting the consumers from being exploited etc., promoting
backward regions of the country and achieving balanced regional development.
The public sector had received the best attention from the nation planner and Government
during the 1960s and 1970s. However, from the late 80s, the public sector enterprises have
become objects of controversy and criticism. The great push given to the public sector in the
initial Five Year Plans did start to recede. This paradigm shift can be attributed to the
overwhelming public orientation, namely to serve the social purpose than to run them as profit
making apparatus as in the private sector.
Explanation:
development centres to discharge their social responsibility.
- power for domestic as well as commercial and industrial use.
- backward regions of the country and achieving balanced regional development.