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Asked a question 3 years ago

Describe the Changing role of Public sector.

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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.