Question

If the government have a private sector for providing services why do we need to havepublic sector in our society

Answer 1

If the government has a private sector to provide quality services, why do we need to have a public sector in our society?

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Seems like a question from school assignment.

The basic difference is profit maximisation Vs benefit maximisation.

The private entity is bound to look for profits for its share holders where as the public enterprises is created for welfare of the people. The public enterprises are generally owned by the government and is run using taxpayers money. The public sector has no compulsion for profits as it's primary objective is social welfare.

The kind of infrastructure spend a public entity can do with a 10 to 20 years long term view , is beyond any private capacity.

Hence in any country we see ,roads, bridges etc like capital intensive work is done by public enterprises, as they can get repeated capital from the government for running their business. Where as if a private entity is loss making then it's share holders will close the company instead of putting more money in that loss making enterprise.

Eg like Air India which is hugely loss making but still repeated ly supported by the government with additional money to survive.

Hope this helps to clarify the difference