A

PRESENTATION

ON

The Role And Growth Of Public Sector In India

AGENDA

Objectives

Development

Significance

Evaluation

New Industrial Policy of 1991

Organization

Public Sector

Owned ; Managed and Controlled by the Govt.

Funded by the Govt.

Welfare Oriented

The public sector includes such services as

Police,

Military,

Public roads,

Public transit,

Primary education and

Healthcare for the poor

Objectives To increase capital formation

To set up heavy industries

To check evils of monopoly

To achieve economic equality

To perform welfare activities to set up

defense industries

To promote regional equality

To increase income of the government

To promote self reliance

To increase employment

Low SavingLow Capital Formation

Decrease in Economic

Growth

Hence, in order to accelerate economic growth Private Industries are setup by the Government as it may stimulate ProductionOther IndustriesPromoting InvestmentIncrease In saving

Progress made by Public Enterprises

Plans No. of working public enterprises of central govt.

Total investment (crore)

First plan 1951-56 5 29

Second plan 1956-61 18 121

Third plan 1961-66 48 953

Fourth plan 1969-74 85 3902

Fifth plan 1974-78 132 6237

Sixth plan 1980-85 207 36380

Seventh plan 1985-90 233 84869

Eighth plan 1990-97 236 202020

Ninth plan 1997-02 232 303400

Tenth plan 2002-07 217 665124

Eleventh plan 2011 -12 225 729228

Significance

Capital formation Contribution to domestic product Basic industries Development of infrastructure Import substitution Export promotion Less regional disparities Socialistic pattern of society Resources of economic development Promotes employment Growth of Ancillary industries Sick mills

% share of Public & Private Sector in Capital Formation

0102030405060708090

Public Sector (in %)

private Sector (in %)

Minerals and Metal Trading Corporation

Largest public sector trading body

Also imports imp. Commodities like ferrous and non ferrous metals to the industries as well as the agricultural products.

Known as MMTC ltd.

The State Trading Corporation

Government owned or controlled firm

Engages in procurement of raw materials & export of commodities

Helps Indian manufacturers to find market overseas for their product like oil, sugar etc.

Evaluation

Profitability of Public

Enterprises

Defects of Public

enterprises

Measures and

Suggestion

Profitabilityperformance of public sector industries

-100000

0

100000

200000

300000

400000

500000

600000

700000

800000

1980-81 2000-01 2005-06 2011-12

investment

net profit after tax

Defects of public enterprise

Social objectives Lack of good management Lack of efficiency Long Gestation period Construction expenditure Industrial disputes effect of location Irresponsible labor Underutilization of production capacity High capital output ratio Overstaffing Over capitalization

Comities setup by the govt. to make the public enterprise efficient and raising their profitability

Chargla Commission 1958

Krishna Menon Commission 1959

Admintrative reforms Committee

F. Mohammad Committee 1980

Arjunsen Gupta Committee 1998

Measures and suggestions

Sector corporations Reforms in the board of directors Efficient management and able workers Inspection of public enterprises Proper auditing Full utilization of productive capacity Commercial outlook Increase in efficiency Labor policy Voluntary retirement schemes Board of reconstruction of public sector enterprises Check on extra extravagance Memorandum of understanding

New industrial policy 1991

In place of 17 industries only two have been reserved exclusively for public sector and these atomic energy and railway transport.

Shares of public sector enterprises are being disinvested. Sick public sector enterprises will be subject to the same

policy as private sector enterprises. Public sector enterprises will be made more efficient through

the medium of memorandum of understanding. 50 central public sector enterprises are listed on domestic

stock exchanges as on April 30,2012. Navratans: nine major public sector undertaking were

declared as Navratans b the govt in July 1997. Professional management will result in enhancing the

efficiency and profitability of public sector enterprises.

NAVRATNA COMPANIES

Bharat Heavy Electricals Limited

Bharat Electronics Limited

Bharat Petroleum Corporation Limited

Hindustan Aeronautics Limited

Hindustan Petroleum Corporation Limited

Mahanagar Telephone Nigam Limited

National Aluminium Company Limited

National Mineral Development Corporation Limited

NAVRATNA COMPANIES

Neyveli Lignite Corporation Limited

Oil India Limited

Power Finance Corporation Limited

Power Grid Corporation of India Limited

Rashtriya Ispat Nigam Limited

Rural Electrification Corporation Limited

Shipping Corporation of India Limited

GAIL (India) Limited

Organization of Public Enterprises

Departmental Organization

Public Trust

Public Corporation

Joint Stock Companies

Control Board

Holding Company

Operating Contract

Here are a list of public services.... Can you divide them into either Central Government or Local Government Control?

The armed forces

Recycling

JusticeService

ProvisionOf parksOr open spaces.

Housing

SocialService

NHS

Prison Service

Local Library

Police