Write a note on performance of public sector enterprises in india

Gorewala, would it not have been better and wiser for Life Insurance Corporation to take the written sanction of the Finance Minister before purchasing the shares of Mundhra firms? There are other criteria by which they can be judged.

management of public enterprises in india

These enterprises have taken the lead to initiate development in the core sector. These profits can later on be used for the establishment of new enterprises, expansion and modernisation of the existing units.

Financial performance of public sector enterprises

In other words, reluctance on the part of private entrepreneurs to develop key industries due to high risk and low returns necessitated the establishment of PSEs. There is only one limitation—and the House will agree that it is a very good limitation—that in matters of policy the Central Government will have the final voice. Under this Policy, only three Government Monopolies were established viz. It holds funds in its own name and enjoys complete autonomy in the management of these funds. There is a great need of establishing a just balance between autonomy and control through appropriate conventions and understandings. It will be seen from this table that in the year when the process of privatization or disinvestment was started, profitability of Central Public Enterprises was relatively low. Solved Question for You Q1. On the other hand, the position is better in the case of public sector since the State squeezes the additional savings and invests the same for the development of the country as a whole. Their service rules are guided by the Civil Service Rules.

The public enterprise sector is a major employer. Briefly these are: a The departmental form of organization leads to centralization of authority. The latter will submit it to the legislature through the minister of finance. Suggestions for Improving the Performance of Public Sector Enterprises: The following measures can be suggested for improving the performance of public sector undertakings in India: 1 Managing of these undertakings should be entrusted to the trained and skillful personnel.

Role of public sector in economic development pdf

Performance of Public Sector Enterprises: The economic and social responsibility of the State has led to the progressive enlargement of the public sector in India. Railways, Atomic energy and explosive material. But these motives could not be achieved up to the desired extent. Delays in the installation of units should be avoided. But later on with the increase in the volume of profit earned by those profit making enterprises, the volume of net profit of these enterprises in general has become positive and thus the net profit gradually increased from Rs. A partially owned is one in which the government invests at least 51 per cent of the share capital, the remaining part coming from the public. Excessive expenditure on social overheads causes increase in total cost. The enterprises have created a base for industrialisation, regional development and promotion of public welfare. Heavy Engineering etc. These enterprises employ large capital and the gestation period is also too large. Further, as a pre-requisite for balanced growth, the state controls the key sectors of the economy which is popularly known as the 'commanding heights' rationale of PSEs. PSEs prevent such concentration of economic power. Manmohan Singh and P.

These areas lacked basic industrial and civic facilities like electricity, water supply, township and manpower. PSEs produce importable goods domestically which tend to save precious foreign exchange and facilitate exports.

Explain the financial performance of public enterprises in india.

Essay 7. The enterprises have created a base for industrialisation, regional development and promotion of public welfare. Growth of Public Sector: Since , there has been an impressive growth of the public sector enterprises. The main result of this new policy was that reserved sectors were opened for the private players. Third, there are corporations established by private parties under authority of law, and subject to some degree of supervision by the government, but in which there is no element of government or broad representation. In India, PSEs are assigned the responsibility of fulfilling specific social goals like correcting regional and economic imbalances, providing employment and reducing the concentration of monopoly power in the economy. In actual practice a tendency of transgressing their limits and encroaching upon the jurisdiction of the other is observed in both the corporation and the minister. Fourthly, the corporation system will offer immediate relief to the legislature from the burden of considering the details of organization, powers, functions, method of work, annual appropriations etc. Robson divides them into seven categories on the basis of the nature of their activities. In a study published recently, R. It has contributed to a significant extent in improving the overall employment situation in the country and has acted as a model employer by providing the worker with better wages and other facilities as compared to the private sector. The strict and rigid financial and administrative controls make the administration of such enterprises non-flexible. At present in our country, there are State public sector enterprises and central public sector enterprises approximately employing nearly about 1,00, managers. Moreover, two important points need to be mentioned regarding the performances of these public sector enterprises.

We shall consider each problem separately: i The Problem of Legislative Responsibility: Public enterprise is an autonomous body created by an act of the legislature. As far as the share in national production is concerned, public sector enterprises play a pivotal role in the production of fuels, basic metal industries, non-ferrous metal industries, fertilisers and communication equipment.

Performance evaluation of public sector enterprises

The latter will submit it to the legislature through the minister of finance. Thus, total number of, persons employed in the public sector enterprises is about 6. Planning is of particular significance for India where a lot has to be achieved with limited resources and within a limited time. Although some public enterprises are earning a good amount of profit but a good number of other public enterprises are incurring a huge loss leading to a fall in the amount of overall net profit earned by the public sector enterprises in general. Table 4. It is, therefore, suggested that the performance of the public enterprises should be assessed in terms of welfare criteria which involves the following considerations: i Whether public enterprises have promoted welfare by providing essential goods and services at reasonable prices; ii Whether public enterprises have generated additional employment opportunities; iii Whether public enterprises have helped in the development of small-scale and ancillary industries; iv Whether public enterprises have promoted balanced regional development; and v Whether public enterprises have created the necessary infrastructure for the speedy growth of industries. White, there are three types of corporations: First, there are corporations owned by the government either outright or in majority interest and controlled by the government. It is, therefore, necessary that this power should be used judiciously for the efficient working of a corporation. That is why government is on the spree of privatization of these enterprises. In on the working of Damodar Valley Corporation Mr. Public investment in financial services which include commercial banks, nationalized insurance companies Rs.

Fourthly, the corporation system will offer immediate relief to the legislature from the burden of considering the details of organization, powers, functions, method of work, annual appropriations etc.

The ministerial powers should not be misused for political purposes.

problems of public sector
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Study Material LESSON 2 ‘PUBLIC SECTOR ENTERPRISES IN INDIA’