Question

Which demerits are associated with private sector? Answer in brief

Answer 1

1. the private sector is owned by an individual or a group of individuals.
2. it doesn't care about the needs and welfare of people as the main aim of this sector is to earn maximum profits.
3. this sector provide consumer goods to the people
4. for e.g : the reliance , TISCO etc.

Answer 2

The demerit is that the organisation can move to another country taking its tax revenue with it.

The organisation has no loyalty to the state and therefore will try its hardest to reduce its tax burden.

The organisation’s activities need to be monitored by the state (e.g. health and safety, employment law), and this is a cost to the state.

The organisation can fail thereby throwing many people (voters) out of work, this then becomes a burden the state must take up.

The private organisation is essential to a country’s prosperity though no government can entirely trust any private organisation.