At the time of Independence, it was
expected that the public sector
enterprises would play an important
role in achieving certain objectives of
the economy either by direct
participation in business or by acting
as a catalyst. The public sector would
build up infrastructure for other sectors
of the economy and invest in key areas.
The private sector was unwilling to
invest in projects which required heavy
investment and had long gestation
periods. The government then took it
upon itself to develop infrastructural
facilities and provide for goods and
services essential for the economy.
participate and compete in the market
with other private sector companies
in the same industry. They were also
held accountable for losses and
return on investment. If a public
sector was making losses
continuously, it was referred to the
Board for Industrial and Financial
Reconstruction (BIFR) for complete
overhauling or shut down. Various
committees were set up to study the
working of inefficient public sector
units with reports on how to improve
their managerial efficiency and
profitability. The role of public sector
is definitely not what was envisaged
in the early 60’s or 70’s.