Out lines of pubic


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Out lines of pubic

  1. 1. Out Lines Of Pubic And Private Sectors By Mishok Puneeth Vinuthna
  2. 2. Contents • Public sector • Objectives of public sector • Private sector • Objectives of private sector • Arguments for privatisation • Key Obstacles to privatisation • Conclusion
  3. 3. Public Sector A public enterprise is an organization which is • Owned by public authorities including central state or local authorities to an extent of 50% or more • It is established for achievement of a defined set of public purpose, which may be multidimensional in character.
  4. 4. Objectives • To help in rapid growth and industrialization and create necessary infrastructure for economic development. • Promote redistribution of income & wealth • Create employment opportunities • Promote regional balance development • Basic Infrastructure (Roads , Railways,..)
  5. 5. Private sector • The part of the economy that is not state controlled, and is run by individuals and companies for profit.
  6. 6. Objectives Of Private Sector • To earn the highest profits • Fulfil the desires of the shareholders and it will always aim to fulfil their satisfaction. • To increase the market shares to get a sustainable competitive advantage
  7. 7. privatisation • Privatisation Transfer of ownership and control of an existing public sector enterprise ,activity or service to the private sector. Privatization may be full or partial. It may be selective i.e., Some function are transformed to the private sector, which other are retained in public sector.
  8. 8. Objectives of privatisation • To improve the performance of CPSU’s (central public sector undertaking) so as to lessen the financial burden on tax players. • Increasing the size and dynamism of the private sector. • Generating revenues for the state. • Reducing the administrative burden on the state
  9. 9. Arguments For Privatisation • The ability of the public enterprises to improve their management system and to respond to the challenges of globalisation. • The inability of government to sustain long- term funding of losses of public sector enterprises. • The inability of public sector generate, obtain and invest adequate funds in a timely manner, for expanding their infrastructure.
  10. 10. Arguments For Privatisation cont • The compulsion of governments to raise resources for balancing government budgetary deficits. • Raising expectations of tax payers and consumers from government system to reduce taxes and improve services.
  11. 11. key obstacle to privatization • Lack of strong and high level political commitment to the privatization program • Inappropriate design of privatization strategy ( eg. In term of scope, technique sector and institutional capability of the government) • Unclear and weak institutional frame work- decentralized or centralized.
  12. 12. key obstacle to privatization cont • Underdeveloped capital markets • Lack of proper preparation of enterprise for privatization or diverstiture Eg. Accounting and auditing , treatment of losses, social and environmental safety net
  13. 13. Conclusion • Privatisation is not the only way to put the CPSEs (Central Public Sector Enterprise) on the right track. • Nepotism and corruption even among private sector units. • Before planning for further privatisation, India needs better governance, responding and quality judicial system.