(i) To promote rapid economic development by filing critical gaps in the industrial structure
(ii) To provide basic infra-structural facilities for the growth of the economy;
(iii) To undertake economic activity strategically important for the growth of the country, which, if left to private initiative, would distort the national objectives;
(iv) To achieve balanced regional development and dispersal of economic activity through growth and diversification of economic activity in less developed areas by providing adequate infra-structure and undertaking programmes of conservation and development of national resources;
(v) To reduce disparities in income;
(vi) To avoid concentration of economic powder in a few hands;
(vii) To exercise social control and regulation of long-term finance through public financial institutions;
(viii) To control over sensitive areas, i.e., allocation of scarce imported commodities; control over the distribution system in relation to essential goods in order to reduce the margin between prices obtained by the producers and those paid by the consumers;
(ix) To attain self-reliance in different technologies through development of capacity for design and development of machinery, equipment and instruments and elimination of dependence of foreign agencies for these services;
(x) To enhance the employment opportunities by heavy investment in industry and mining, transport and communication; and
(xi) To increase exports and earn foreign exports and earn foreign exchange to ease the pressure of Balance of Payments.
Public sector has come to assume the commanding heights of the economy. It was monopoly in railways, communication and air transport; virtual monopoly in coal mining, power generation and petroleum industry; a predominant share in banking, insurance, shipping, steel and other metals; machine tools, fertilizers, insecticides, and petrochemicals; and share in light engineering industries like drugs;textiles garbages industries; consumer goods form break of electronic new industries, it has also been taking over old opens which became sick.
Public sector has played a significant role in the industrialization of the country. By establishing the basic and heavy industries and providing the infrastructure, it has enabled growth of innumerable light industries and also taking over old ones which became sick.
Public sector has played a significant role in the industrialization of the country. By establishing the basic and heavy industries and providing the infrastructure, it has enabled growth of innumerable light industries and also provided the virtual inputs of ushering the “Green Revolution”. It has also played a pioneering role in dispersing industries in various regions of the country particularly in the backward area.
It is generally recognized as a “model employer” providing fair wages, good working conditions and amenities, and recognizing the rights of the workers. As a result, industrial relations, except in certain units and for some time past, are better and the mandays lost are much less than n the private sector.
In spite of its phenomenal growth and achievements, the public sector has come in for criticism for its major shortfalls. The most important defect in the public sector is the overall net loss incurred by it. The non-utilization of the rated capacity, by the public sector undertakings, is another major shortcoming. The shortfalls in core items in particular adversely affect the growth of the entire economy. Some of the other defects in the sector are:
(i) lack of professional management; (ii) lack of autonomy for the mangers of undertakings; (iii) adoption of bureaucratic procedures which breed delay; (iv) appointment for surplus labour; (v) over stocking of inventories; (vi) unproductive expenditures; (vii) neglect in maintenance of equipment; (viii) taking over the burden of sick industries; (ix) uneconomic pricing of products; and (x) lack of organic linkages between the big plants and small industries.