ROLE

OF
PUBLIC AND PRIVATE SECTOR
IN
ECONOMIC DEVELOPMENT
OF
INDIA

By :
SWAPNIL
SAHU
Roll no. 37
MBA I sem.
 INDIA
MIXED ECONOMY

COMMUNISM CAPITALISM

PUBLIC SECTOR PRIVATE SECTOR

ROLE OF PUBLIC SECTOR IN INDIAN ECONOMY

1.Capital formation

2.Development of infrastructure

3.Strong industrial base

4.Removal of regional disparities

5.Import substitution and export promotion

6.Check over concentration of economic power

 PERFORMANCE OF PUBLIC SECTOR

1.Expansion of public sector as well as its share in national

production

2.Employment and labor welfare

3.Contribution to Foreign exchange and its earnings

 SHORTCOMINGS OF PUBLIC SECTOR

1.Mounting losses

2.Political influence

3.Problems of labor, personnel and management

4.Planning related to planning and construction of projects

5.Under utilization of capacity

6.Price policy
INDUSTRIAL POLICY 1991

1.Reduction in the number of industries reserved for the

public sector from 17 to 8 (reduced further to 6).
2.Disinvestment of shares of a select set of public
sector enterprises in order to raise resources and to
encourage wider participation of general public and
workers.
3.The policy towards sick public enterprises to be the
same as that for the private sectors.
4.An improvement of performance through memorandum of
understanding system by which managements are to be
granted greater autonomy but held accountable for
specified results.
ROLE OF PRIVATE SECTOR IN INDIAN ECONOMY

1.The dominant sector

2.General economic development

3.Private sector in agriculture

4.Extensive modern industrial sector

5.Private sector in trading

6.Potentialities due to personal incentive in the small sector

 SHORTCOMINGS OF PRIVATE SECTOR

1.Emphasis on non priority industries and wastage of resources

2.Monopoly and concentration

3.Contribution to trade deficits

4.industrial disputes

5.Industrial sickness

6.Problems relating to foreign competition

7.Problems relating to finance and credit

 PERFORMANCE OF PUBLIC AND PRIVATE SECTOR IN INDIA
(at current prices) (Rs crore)
S. No. Item 1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06

1. Gross Domestic Product 1786525 1925415 2100187 2265304 254941 2855933 3250932
1.1 Public 457006 481861 526326 578851 626219 686333 748528
1.2 Private 1329519 1443554 1573861 1686453 1923199 2169600 2502404

2. Gross Domestic Saving 484256 497218 535583 648982 820504 973028 1156809
2.1 Public -15494 -35061 -46578 -14057 31822 74682 71262
2.2 Private 499750 532279 582161 663039 788682 898346 1085547

3. Gross Domestic Capital 493999 491457 529376 600723 710014 886575 1104797
3.1 Public 144610 144639 156544 149324 174597 220487 264426
3.2 Private 349389 346818 372832 451399 535417 666088 840371

4. Final Consumption Expenditure 1510285 1611819 1748476 1836446 2024085 2216271 2476590
4.1 Public 252744 265401 282123 291320 310635 342542 404511
4.2 Private 1257541 1346418 1466353 1545126 1713450 1873729 2072079

PERCENTAGE SHARE OF PUBLIC SECTOR

1.Gross Domestic Product 25.6 25.0 25.1 25.6 24.6 24.0 23.0
2.
4.Gross Domestic Saving -3.2 -7.1 -8.7 -2.2 3.9 7.7 6.2
5.
7.Gross Domestic Capital Formation 29.3 29.4 29.6 24.9 24.6 24.9 23.9

4. Final Consumption Expenditure 16.7 16.5 16.1 15.9 15.3 15.5 16.3
CONCLUSION

Private and public, both sectors have contributed

in the development of India. But both have got
shortcomings as well. The need of the hour is that
both sectors should work in compatibility with each
other rather than contrast. Joint efforts of these
will accelerate the economic development and India
will be a developed country.
REFERENCES

Books:

Indian Economy ,by :Ruddar Dutt, K.P.M. Sundaram(2006)

Web :

India 2008 : a reference annual, ministry of information and

broadcasting, government of India.

Indian economy: wekipedia.com

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