Role of public sector enterprises in india industrialization
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Public Sectors in Indian Economy:
In India, a public sector company is that company in which the Union Government or State Government or any Territorial Government owns a share of 51 % or more. Currently there are just three sectors left reserved only for the government i.e. Railways, Atomic energy and explosive material. Private sectors/players are not allowed to operate in these sectors.
Before the independence of India, there were only a few public sector companies in the country this includes, Indian Railways, the Port Trusts, the Posts and Telegraphs, All India Radio and the Ordinance Factory are some of the major examples of the country’s public sector enterprises. However, post Indian independence, some policies for the development of the socio-economic status of the country were planned out by the then visionary leaders, where the public sector were used as a tool for the self-reliant growth of the nation’s economy.
This was the reason that the second five year plan of India was solely based on the development of the different industries. Till 1990s major sectors of the economy were reserved only for the government, this caused the great loss of our precious natural resources and the whole country trapped into the great economic problem. From the very first five year plan till 1980s our country grows with the average rate of 3.5% per year (which is called Hindu rate of growth by Prof. Rajkrishna).
But later on the in 1991, july our new economic policy was launched under the leadership of Mr. Manmohan Singh and P.V. Narsimha Rao.
The main objectives of this new economic policy were:
1. To maintain a sustained growth in productivity
2. To enhance gainful employment
3. To achieve optimum utilization of human resources
4. To transform India into a major partner and player in the global arena.
5. To take out Indian economy from the vicious circle of poverty.
6. Open the Indian economy to interact openly with the rest of the world.
The main result of this new policy was that reserved sectors were opened for the private players. Public sectors were not able to operate at its optimum pace.
Objectives: The public sector aims at achieving the following objectives:
To promote rapid economic development through creation and expansion of infrastructure
• To generate financial resources for development
• To promote redistribution of income and wealth
• To create employment opportunities
• To promote balanced regional growth
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Performance of Central Public Sector Undertakings
There were altogether 248 CPSEs under the administrative control of various ministries/departments as on 31 March 2011. Out of these, 220 were in operation and 28 were under construction. The share of cumulative investment (paid-up capital plus long-term loans) in all the CPSEs stood at Rs. 6,66,848 crore as on 31 March 2011 ,showing an increase of 14.8 per cent over 2009-10. The share of manufacturing in gross block, during 2010-11, was 27.8 per cent. The share of mining, electricity, and services in total investment, in terms of gross block, was 23.0 per cent, 25.2 per cent, and 23.2 per cent respectively. The net profit of (158) profit-making CPSEs stood at Rs. 1,13,770 crore in 2010-11. The net loss of (62) loss-making enterprises, on the other hand, stood at Rs. 21,693 crore during the same period. The year also witnessed severe financial 'under-recoveries' by public-sector oil marketing companies (OMCs) as they had to keep the prices of petroleum products low in the domestic market despite high input prices of crude oil.
Problems of Public Sectors:
• Poor policy making and its execution
• Over staffing
• Wastage of resources or under utilization of resources
• Higher operating cost
• Lack of motivation for self improvement
• Lack of proper price policy
List of Navratna companies in India:

Conclusion:
The expansion of the public sector was aimed at the fulfillment of our national goals, that is., the removal of poverty, the attainment of self-reliance, reduction in inequalities of income, expansion of employment opportunities, removal of regional imbalances, acceleration of the pace of agricultural and industrial development, to reduce concentration of ownership and prevent growth of monopolistic tendencies by acting as effective countervailing power to the private sector, to make the country self-reliant in modern technology and create professional, technological and managerial cadres so as to ultimately rid the country from dependence on foreign aid. But these motives could not be achieved up to the desired extent. That is why government is on the spree of privatization of these enterprises
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The important role of public sector enterprises in India industrialization are in regards to improving on the economic development of the country by generating more income, providing employment to the people and creating an effective industrial base in the country
Explanation:
- The public sector organisations have played a major role in providing employment for the people and they have been an essential source of bringing in revenues for the growth and development of the economy
- The Public Sector enterprises have a significant role to play in taking acre of the public utility services, transportation, posts and telegraphs and the railways in the country. They have been spending a lot of money on developing the infrastructure in the country.
- The public sector has also been promoting and contributing to the exports in the country. The public sector enterprises have come up also in smaller towns and districts to remove 'economic disparity' from the country. This is very important for the growth and development of the country
To know more about public sector enterprises
What are the differences between private sector enterprise and public sector enterprise?
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