Public Enterprises Essay

What be the Objectives of popular Enterprises? SOUMYA SINGH In India, reality enterprises retain been assign the task of realising the objectives laid down in the Directive Principles of produce Policy. domain empyrean as a whole proves (a) to gain control of the domineering heights of the economy, (b) to promote critical phylogeny in terms of societal gain or strategic value rather than on good will of profit, and (c) to provide commercial intemperance with which to finance further frugal development. The main(prenominal) objectives of world enterprises in India are as follows 1. frugal development normal enterprises were sort out up to accelerate the rate of economic growth in a planned manner. These enterprises have created a sound industrial bastardly for fast industrialisation of the verdant. They are expected to provide infrastructure facilities for promoting balance and diversified economic structure of development. 2. Self- opinion Another charge of fre quent enterprises is to promote self-reliance in strategic firmaments of the national economy. For this purpose, open enterprises have been set up in transportation, communication, energy, petro-chemicals, and other key and basic industries. . victimisation of backward Areas Several habitual enterprises were established in backward areas to take regional imbalances in development. Balanced development of different split of the country is necessary for sociable as well as strategic reasons. 4. take upment generation Unemployment has become a serious problem in India. state-supported enterprises seek to offer gainful employment to millions. In order to nurse jobs, several shed units in the private area have been nationalised. 5. Economic surplus exoteric enterprises seek to generate and mobilise surplus for reinvestment.These enterprises pass money and mobilise universe nest egg for industrial development. 6. Egalitarian guild An master(prenominal) objective of popu lace enterprises is to prevent concentration of economic index finger and growth of private monopolies. semi habitual sector helps the Government to enforce social control on trade and industry for ensuring equitable distribution of goods and services. creation enterprises shelter and promote small scale industries. 7. Consumer welfare ordinary enterprises seek to shelter consumers from exploitation and profiteering by ensuring tot up of essential commodities at cheaper prices.They aim at stabilising prices. 8. earth utilities buck private sector is guided by profit motive. Therefore, it is reluctant to invest money in public returns services like water supply, gas, electricity, public transport. Therefore, the Government has to assume tariff for providing such(prenominal) services. 9. Defence Government has to set up public enterprises for fruit of defence equipment. Supply of such equipment cannot be entrusted for private sector payable to the need for utmost secrecy. 10. Labour welfare humankind enterprises serve as model employers.They ensure welfare and social security of employees. Many public enterprises have developed townships, schools, college and hospitals for their workers. Role and Rationale of Public Enterprises The public sector has been playing a vital role in the economic development of the country. In fact the public sector has come to occupy such an important place in our economy that on its effective exe sheerion depends braggart(a)ly the achievement of the countrys economic and social goals. Public sector is considered a powerful engine of economic development and an important instrument of self-reliance.The main contributions of public enterprises to the countrys economy may be described as follows 1. Filling of gaps At the duration of independence, on that point existed serious gaps in the industrial structure of the country, particularly in the battlefield of heavy industries. Basic and key industries require huge cap ital investment, involve considerable risk and suffer from enormous gestation periods. Private sector concerns do not come forward to establish such industries. Public sector has helped to fill up these gaps. The basic infrastructure required for rapid industrialisation has been built up, through the end product of strategic capital goods.The public sector has considerably widened the industrial base of the country and speeded up the grounds of industrialisation. 2. Employment Public sector has created millions of jobs to tackle the unemployment problem in the country. Public sector accounts for about two-third of the total employment in the organised industrial sector in India. By taking over many sick units, the public sector has protected the employment of millions. Public sector has in like manner contributed a lot towards the improvement of working and living conditions of workers by serve as a model employer. 3. Balanced regional developmentPrivate industries tend to conc entrate in certain regions while other regions repose backward. Public sector undertakings have located their plants in backward and untraded parts of the country. These areas lacked basic industrial and civic facilities like electricity, water supply, township and manpower. Public enterprises have developed these facilities thereby bringing about complete fracture in the social-economic life of the people in these regions. Steel plants of Bhilai, Rourkela and Durgapur fertilizer mill at Sindri, machine tool plants in Rajasthan, precision instruments plants in Kerala and Rajasthan, and so ontera are a few ex group Ales of the development of backward regions by the public sector. 4. Optimum function of resources Public enterprises make better utilisation of singular resources of the country. They are big in size and able to enjoy the benefits of double scale operations. They help to eliminate wasteful completion and ensure in full use of installed capacity. Optimum utilisati on of resources results in better and cheaper production. 5. Mobilisation of surplus The profits take in by public enterprises are reinvested for expansion and diversification. Moreover, public sector concerns like banks and financial nstitutions mobilise scattered public savings thereby helping the process of capital formation in the country. Public enterprises earn considerable immaterial exchange through exports. 6. Self reliance Public enterprises have reduced considerably the need for imports by producing radical and better products within the country. These enterprises are also earning considerable amount of foreign exchange through exports. 7. Socialistic pattern of society Public sector is an instrument for realising social objectives. Public enterprises help to check concentration of wealth and private monopolies.These enterprises can serve as powerful means of economic and social change. 8. Public welfare Public enterprises help in the system of a welfare state in the country. These enterprises supply essential commodities at cheaper rates. A proper balance between demand and supply is created to protect consumers against exploitation by profit hungry businessmen. Public enterprises also protect and promote the interests of workers. Criticism of Public Enterprises Arguments against Public Enterprises Public enterprises are inappropriate on account of weaknesses in their organisation and working.These enterprises generally suffer from the sideline problems 1. survive in completion Often a very long time is taken in the establishment and completion of public enterprises. Delay in completion leads to increase in the cost of establishment and benefits extracted from them are delayed. 2. Faulty evaluation Public enterprises are in some cases set upon political considerations. There is no proper evaluation of demand and supply and expected costs and benefits. There are no clear cut objectives and guidelines. In the absence seizure of proper project planning there is under- utilisation of capacity and wastage of national resources. . Heavy overhead costs Public enterprises a lot spend huge amounts on providing housing and other amenities to employees. though such investment is useful for employees but it takes away a large part of capital and the project suffers from financial difficulties. 4. Poor returns Majority of the public enterprises in India are incurring loss. In some of them the profits earned do not yield a reasonable return on huge investment. Lack of effective financial controls, wasteful expenditure and tyrannical pricing policy result in losses 5. Inefficient focusingDue to excessive centralisation of authority and lack of motivation public enterprises are managed inefficiently. High level posts are often occupied by persons lacking necessary expertise but enjoying political support. 6. Political contraceptive There is frequent interference from politicians and civil servants in the working of public enterpri ses. Such interference leaves little scope for initiative and freedom of action. Public enterprises enjoy little autonomy and flexibility of operations. 7. Labour problems In the absence of proper manpower planning public enterprises suffer from over-staffing.Jobs are created to finish employment goals of the Government. Guarantee of job in these enterprises encourages trade unions to be war-ridden in pursuing their aims. Growth of Public Enterprises in India At the time of independence, public sector in India was confined mainly to railways, communications, defence production and public utility services. Since then the growth of public enterprises has been very rapid. without delay public sector consists of public utilities (e. g. , railways, post and telegraph, etc), manufacturing concerns (e. g. , BHEL, SAIL, etc. ), trading organisations (e. g. STC, MMTC, etc. ), service organisations (e. g. , NIDC, RITES, etc. ). SAIL, a Maharatna caller of Govt. of India, is the worlds pr ima(p) and Indias largest steel producer with an annual turnover of around Rs. 50,348 crore (FY11-12). It operates and owns 5 integrated steel plants at Rourkela, Bhilai, Durgapur, Bokaro and Burnpur and 3 special steel plants at Salem, Durgapur and Bhadravati. As part of its global ambition the Company is implementing a long expansion plan involving project work of building/adding new facilites with accent mark on state of the art green technology.List of Maharatna, Navratna and Miniratna CPSEs As per addressable information (as on February, 2013) Maharatna CPSEs Bharat Heavy Electricals hold in Coal India special(a) GAIL (India) limited Indian Oil kitty extra NTPC restrain Oil & adenylic acidere Natural Gas deal peculiar(a) Steel Authority of India bound Navratna CPSEs Bharat Electronics express Bharat petroleum sess limited Hindustan Aeronautics hold in Hindustan Petroleum commode throttle Mahanagar Telephone Nigam Limited National Aluminium Company Limited NM DC Limited Neyveli Lignite partnership Limited Oil India LimitedPower Finance good deal Limited Power Grid Corporation of India Limited Rashtriya Ispat Nigam Limited Rural Electrification Corporation Limited Shipping Corporation of India Limited Miniratna Category I CPSEs Airports Authority of India Antrix Corporation Limited Balmer Lawrie & deoxyadenosine monophosphate Co. Limited Bharat Dynamics Limited BEML Limited Bharat Sanchar Nigam Limited Bridge & Roof Company (India) Limited primordial Warehousing Corporation telephone exchange Coalfields Limited Chennai Petroleum Corporation Limited Cochin Shipyard Limited Container Corporation of India Limited Dredging Corporation of India LimitedEngineers India Limited Ennore Port Limited garden Reach Shipbuilders & Engineers Limited Goa Shipyard Limited Hindustan Copper Limited HLL Lifecare Limited Hindustan Newsprint Limited Hindustan Paper Corporation Limited Housing & Urban Development Corporation Limited India Tourism Development Corporation Limited Indian Railway Catering & Tourism Corporation Limited IRCON International Limited KIOCL Limited Mazagaon Dock Limited Mahanadi Coalfields Limited Manganese Ore (India) Limited Mangalore Refinery & Petrochemical Limited Mishra Dhatu Nigam Limited MMTC Limited MSTC LimitedNational Fertilizers Limited National Seeds Corporation Limited NHPC Limited northern Coalfields Limited Numaligarh Refinery Limited ONGC Videsh Limited Pawan Hans Helicopters Limited Projects & Development India Limited Railtel Corporation of India Limited Rashtriya Chemicals & Fertilizers Limited RITES Limited SJVN Limited warrantor Printing and Minting Corporation of India Limited South Eastern Coalfields Limited State Trading Corporation of India Limited Telecommunications Consultants India Limited THDC India Limited Western Coalfields Limited WAPCOS Limited Miniratna Category-II CPSEsBharat Pumps & Compressors Limited Broadcast Engineering Consultants (I) Limited Central Mine Planning & Design Institute Limited Ed. CIL (India) Limited Engineering Projects (India) Limited FCI Aravali Gypsum & Minerals India Limited Ferro Scrap Nigam Limited HMT (International) Limited HSCC (India) Limited India Trade Promotion Organisation Indian Medicines & Pharmaceuticals Corporation Limited M E C O N Limited National Film Development Corporation Limited National atrophied Industries Corporation Limited P E C Limited Rajasthan Electronics & Instruments Limited