Feb 9, 2023

Public Enterprises Objectives And Responsibilities


Public Enterprises Objectives Responsibilities

Public Enterprises Objectives

Public Enterprises Corporations have been assigned the undertaking of realising the goals laid down in the Directive Principles of State Policy. Public zone as a whole seeks to reap manage of the commanding heights of the economy, to promote quintessential improvement in terms of social or strategic cost alternatively than on consideration of profit, and to supply commer­cial surplus with which to finance similarly economic development. The main goals of public organisations are as follows

Economic development

Public enterprise have been set up to speed up the charge of financial growth in a deliberate manner. These agencies have created a sound industrial base for speedy industrialisation of the country. They are predicted to supply infrastructure services for promot­ing balanced and diversified economic shape of development.


Another aim of public enterprise is to promote self-reliance in strategic sectors of the national economy. For this purpose, public corporations have been set up in transpor­tation, communication, energy, petro-chemicals, and other key and basic industries.

Development of Backward Areas

Several public enterprise have been hooked up in back­ward areas to limit regional imbalances in development. Balanced development of one-of-a-kind parts of the usa is necessary for social as nicely as strategic reasons.

Employment Generation

Unemployment has emerge as a serious trouble. Public organisations are seeking to provide gainful employment to millions. In order to shield jobs, countless unwell devices in the private sector have been nationalised.

Economic Surplus

Public enterprise are seeking for to generate and mobilise surplus for reinvest­ment. These businesses earn cash and mobilise public financial savings for industrial development.

Egalitarian Society

An necessary objective of public enterprise is to forestall concentra­tion of financial energy and boom of private monopolies. Public quarter helps the Government to implement social manipulate on alternate and enterprise for ensuring equitable distribution of goods and services. Public enterprise guard and promote small scale industries.

Consumer Welfare

Public enterprise are looking for to shield buyers from exploitation and profiteering by means of making sure furnish of necessary commodities at more cost effective prices. They goal at stabilising prices.

Public Utilities

Private area is guided by means of earnings motive. Therefore, it is reluctant to make investments money in public utility offerings like water supply, gas, electricity, public transport. There­fore, the Government has to assume accountability for offering such services.


Government has to set up public businesses for manufacturing of defence equip­ment. Supply of such tools can't be entrusted for non-public region due to the need for utmost secrecy.

Labour Welfare

Public organisations serve as mannequin employers.  Many public agencies have developed townships, schools, col­lege and hospitals for their workers.

Role And Responsibilities Of Public Enterprises

The public sector has been taking part in a fundamental position in the economic improvement of the country. In truth the public area has come to occupy such an essential region in our financial system that on its superb overall performance depends generally the fulfillment of the country’s financial and social goals. Public area is regarded a effective engine of economic improvement and an vital instrument of self-reliance. The foremost contributions of public businesses to the country’s economic system may also be described as follows:

Filling of Gaps

At the time of independence, there existed serious gaps in the industrial shape of the country, specially in the subject of heavy industries. Basic and key industries require huge capital investment, contain full-size risk and suffer from long gestation peri­ods. Private quarter worries do now not come ahead to set up such industries. Public quarter has helped to fill up these gaps. The fundamental infrastructure required for rapid industrialisation has been constructed up, via the production of strategic capital goods. The public area has appreciably widened the industrial base of the u . s . a . 


Public region has created thousands and thousands of jobs to tackle the unemployment trouble in the country. Public sector accounts for about two-third of the complete employment in the organised industrial region. By taking over many sick units, the public area has pro­tected the employment of millions. Public area has also contributed a lot closer to the improve­ment of working and living prerequisites of employees through serving as a mannequin employer.

Balanced Regional Development

Private industries have a tendency to pay attention in sure regions whilst other regions continue to be backward. Public region undertakings have located their vegetation in backward and untraded components of the country. These areas lacked primary industrial and civic services like electricity, water supply, township and manpower. Public corporations have devel­oped these services thereby bringing about entire transformation in the social-economic lifestyles of the humans in these regions, improvement of backward regions via the public sector.

Optimum Utilisation of Resources

Public organisations make better utilisation of scarce sources of the country. They are large in dimension and in a position to revel in the benefits of giant scale operations. They assist to remove wasteful completion and make sure full use of set up capacity. Optimum utilisation of resources effects in better and less expensive production.

Mobilisation of Surplus

The earnings earned via public corporations are reinvested for ex­pansion and diversification. Moreover, public zone issues like banks and financial institu­tions mobilise scattered public savings thereby helping the process of capital formation in the country. Public agencies earn vast overseas change via exports.

Self Reliance

Public businesses have decreased considerably the need for imports by way of producing new and higher merchandise within the country. These companies are also incomes consid­erable amount of overseas alternate thru exports.

Socialistic Sample of Society

Public zone is an instrument for realising social objec­tives. Public companies help to check awareness of wealth and personal monopolies. These firms can serve as effective ability of financial and social change.

Public Welfare

Public businesses assist in the institution of a welfare kingdom in the country. These businesses furnish vital commodities at more cost effective rates. A appropriate stability be­tween demand and provide is created to defend shoppers towards exploitation by way of profit hungry businessmen. Public agencies also shield and promote the pastimes of workers.

Criticism of Public Enterprises

Public businesses are adversarial on account of weaknesses in their enterprise and working. These corporations generally suffer from the following problems:

Delay in Completion

Often a very long time is taken in the institution and comple­tion of public enterprises. Delay in completion leads to enlarge in the fee of institution and advantages extracted from them are delayed.

Faulty Evaluation

Public businesses are in some cases set upon political considerations. There is no suited evaluation of demand and supply and anticipated fees and benefits. There are no clear reduce targets and guidelines. In the absence of ideal task planning there is under- utilisation of ability and wastage of country wide resources.

Heavy Overhead Costs

Public organizations frequently spend big quantities on presenting hous­ing and different amenities to employees. Though such investment is beneficial for employees but it takes away a large part of capital and the project suffers from financial difficulties.

Poor Returns

Majority of the public firms are incurring loss. In some of them the profits earned do no longer yield a sensible return on huge investment. Lack of effective economic controls, wasteful expenditure and dogmatic pricing coverage end result in losses

Inefficient Management

Due to immoderate centralisation of authority and lack of motiva­tion public corporations are managed inefficiently. High degree posts are frequently occupied by way of humans missing indispensable expertise but playing political support.

Political Interference

There is generic interference from politicians and civil servants in the working of public enterprises. Public enterprises experience little autonomy and flexibility of operations.

Labour Problems

In the absence of desirable manpower planning public organizations go through from over-staffing. Guarantee of job in these firms encourages trade unions to be militant in pursuing their aims.

Growth of Public Enterprises

At the time of independence, public zone used to be restrained in general to railways, com­munications, defence production and public utility services. Since then the growth of public businesses has been very rapid. Now public zone consists of public utilities (e.g., railways, and Telecom, etc), manufacturing concerns, trading corporations, and goods and services carrier enterprises.