Public Sector Enterprises: Comparative view, Importance of Public Sector Enterprises

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Comparative View of Public Sector Enterprises

Comparative View of Public Sector Enterprises
Comparative view of Public Sector Enterprises

Sr. No.

Departmental Undertaking

Public Corporations

Government Companies


By Ministry

By Parliament

By Ministry with or without private participation

Legal status

No Separate entity

Separate entity

Separate corporate existence


Provided out of budgetary appropriation

Provided wholly by Government

Part of it provided by Private entrepreneurs


Government official from ministry concerned

Board of Directors

Board of Directors may include private individual

Control and Accountability

Minster and Ministry concerned




No Autonomy

No Governmental interference

Some freedom from governmental interference


Defense, Public utilities

Heavy industries and service providing enterprise

All types of industrial and commercial enterprises

Table title: Comparative view of Public Sector Enterprises

Table description: Showing table of comparative view of Public Sector Enterprises

Importance of Public Sector Enterprises

  • Government establishes its enterprises only for some selected areas for a balanced development of the economy and promote public welfare.

  • Obtained only after a long period as in case of generation and supply of electricity, machine building, construction of dams, etc.

  • Private businessmen hesitate to establish their enterprises in these areas but they cannot be disused in public interest.

  • Help in balanced regional development by promoting industries in every part of the country.

  • For example, with the establishment of Bhilai Steel Plant in Madhya Pradesh, several new small industries have come up in that state.

  • Industrial progress is of utmost importance for the development of the country.

  • Production of heavy electrical goods, etc. are to be fully developed.

  • Development of public enterprises also prevents concentration of economic power in the hands of an individual, or a group of individuals.

  • Help in reducing inequalities with the help of various policies like utilizing the earned profits in public welfare activities.

  • Necessary for the economic progress of the country.

  • Public enterprises also ensure promotion of such industries.

  • Major goals achieved through public enterprises:

    • Public welfare

    • Planned economic development of the country

    • Regional balance

    • Import substitution

    • Checking concentration of economic powers

Current Scenario

Public sector enterprises occupy an important place in the Indian economy.

  • At the time of independence: Very few public sector enterprises in our country.

  • After getting independence: Government felt that if the country needs to speed up its economic growth, then state’s intervention in all sectors of the economy is inevitable.

  • First five-year plan (1951): Government’s investment was Rs. 29 crores in 5 central public sector enterprises.

  • During 2004-05: Their contribution to the central exchequer was Rs. 1,10,599 crores.

  • On 24 July 1991: Government of India announced its Industrial policy to improve the performance and portfolio of public sector enterprises.

  • In July 1997: Government identified nine central public sector enterprises as ‘Navaratnam’.

  • In October 1997: Government granted enhanced autonomy and delegation of financial power to some other profit-making public-sector enterprises.

  • Till 30 March 2006: Government has approved revival plan of 15 cases

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