Production: Identifying Various Types of Producers in the Economy (For CBSE, ICSE, IAS, NET, NRA 2022)

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Identifying Various Types of Producers in the Economy

Government Production Units

  • Government provides a lot of services such as education, health care, law and order, post and telegraph, transport, telecommunication and broadcasting etc. Some of the organizations providing these services are run by the Departments and Ministries of the government. They are called Departmental Enterprises. Some examples of Departmental Enterprises are Indian Railways under the Ministry of Railways, All India Radio and Door darshan which are sister concerns of Parashar Bharti under the Ministry of Information and Broadcasting etc.
  • There is another type of government production units which are supported and funded by the government but function independently. They are big Corporations and autonomous in nature. These units are non-departmental enterprises and called Public Sector Undertakings. Some examples of Public Sector Undertakings NTPC, SAIL, BHEL etc.

Foreign Production Units

foreign production unit is located in the country but is owned by foreigners or non-residents of the country. In such production units the contribution of foreigners must be more than 50 % of total capital. The foreign production units are further classified into:

Production: Multinationals
  • Multinationals: These are firms which have their main office in one country but have their business activities spread in many countries. These are called Multi- National Corporations (MNC) because they operate in more than one country other than the country of their origin. Some examples of MNCs in India are- Coca Cola, Pepsi Cola, Johnson & Johnson, Microsoft, Nokia, LG, Google, Ford Motors, Hyundai etc.
  • Collaborations: These are production units in which foreigners and domestic entrepreneurs participate jointly. Such production units are partly indigenous and partly foreign. These are treated as foreign production units in terms of ownership if more than 50 % of its total capital is contributed by the foreigners or non-residents. A good example of collaboration of Indian company with foreign company is -Maruti- Suzuki Limited.

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