PowerPoint Presentation

Public Sector EnterpriseThe business units owned, managed and controlled by the central, state or local government.View to maximise social welfare and uphold the public interest.Consist of nationalised private sector enterprises, such as, banks, Life Insurance Corporation of India and the new enterprises set up by the government such as Hindustan Machine Tools (HMT), Gas Authority of India (GAIL), State Trading Corporation (STC) etc.

CharacteristicsGovernment Ownership and Management: The government may either wholly own the public enterprises or the ownership may partly be with the government and partly with the private industrialists and the public. In any case the control, management and ownership remains primarily with the government. Financed from Government Funds: The public enterprises get their capital from Government fundsPublic Welfare: Public enterprises are not guided by profit motive. Their major focus is on providing the service or commodity at reasonable prices.

Characteristics(contd.) Public Utility Services: Public sector enterprises concentrate on providing public utility services like transport, electricity, telecommunication etc.Public Accountability: Public enterprises are governed by public policies formulated by the government and are accountable to the legislature.Excessive Formalities: The government rules and regulations force the public enterprises to observe excessive formalities in their operations. This makes the task of management very sensitive and cumbersome.3Forms Of OrganisationAdvantagesBalanced growth: By establishing public sector enterprises, a country can develop its economy in all regions. Long period planning: Public sector is always in a better position to plan for future development of an industry.Facilities for economic development: Profits of public enterprises can be used by the state for financing the schemes of economic development.Greater public welfare: Public enterprises do not work for making profit for the owner but they work to help the national economy as a whole.Equal distribution of wealth: With the help of public sector there is possibility for the Government to reduce inequalities of income and wealth among the people.

Advantages (contd.)Abolition of monopoly: As all public enterprises are controlled by the State, the danger of concentration of power in a few hands can be eliminated.Better relation with labour force: In public enterprises labourers' interest is well protected through job security, better working condition etc.Achievement of self-reliance: As public sector helps domestic industry, it is possible for the industry to be self reliant and the country to eliminate foreign goods.Establishment of heavy and strategic industry: These industries require huge capital, thus private enterprises are not interested in these industries. Further some strategic industries, like defense industry, are not permitted to be started by private enterprises.LimitationsLack of initiation and efficiency: Lack of profit motive leads to inefficiency and slow working. Therefore decision making is not quick.Lack of selection of goods: It is a kind of monopoly under the control of Government. Consumers have no choice of selection of goods. Because of the monopolistic attitude of the Government, the buyers lose the right of choice.Political interference: Due to undue influence of politicians, the public sectors cannot function smoothly and effectively. It hampers the efficient conduct of operations.

Limitations (contd.)Slow growth: Public enterprises have little scope for expansion and modernisation as they take a long period to establish and the return on investment is also less.Poor management: Due to excess interference by the Government and political parties, the public enterprises cannot be managed on sound lines or as per the plans laid out. Further the financing of public sector is fully in the hands of the Government, which restricts the scope for development.Lack of flexibility: There is a lack of flexibility in public enterprises. This is due to slow decision making habit of the state. Implementation of the decision also takes a long time in public enterprises.

Case Study NTPCNTPC Limited (formerly National Thermal Power Corporation) (BSE:532555, NSE:NTPC) is the largest Indian state-owned electric utilities company based in New Delhi, India. It is listed in Forbes Global 2000 for 2012 ranked at 337th[3] in the world. It is an Indian public sector company listed on the Bombay Stock Exchange in which at present the Government of India holds 84.5% (after divestment of the stake by Indian government on 19 October 2009) of its equity. With an electric power generating capacity of 41,184 MW, NTPC has embarked on plans to become a 128,000 MW company by 2032. It was founded on 7 November 1975.

THANK YOUMADE BY:.