Objectives of Public Enterprises In Developing Countries
“Government has great finances and it enters those fields where private entrepreneurs cannot come up with the money for investment. In case of railways, shipbuilding, energy producing concerns, huge investments are required and these sectors are very significant for the nation. ”
Every government wants to implement its monetary policies. To this effect various state enterprises are set up. The primary objective of the state enterprises is to serve the people and help in creating an atmosphere of business activity.Comprehensive development of industry in any country is the chief aim of any state enterprise. Governments want to build up all type of industries whether money-spinning or not. Private entrepreneurs spend only in those industries where profit-earning chances are much more.
Even if an enterprise is extremely beneficial for public in general, private businessmen will not venture in it unless they find it lucrative. State enterprises are essential for those lines where private sector is cautious to invest. It helps in all round industrialsation of the nation.
There are some ventures that need a huge amount of investment. Most of the private industrialists cannot afford to make extremely huge investments. Government has great finances and it enters those fields where private entrepreneurs cannot come up with the money for investment.
In case of railways, shipbuilding, energy producing concerns, huge investments are required and these sectors are very significant for the nation. This is in particular true in the case of developing countries.
Government undertakes an assortment of schemes to provide various provisions like electricity, oil, gas, transport, water facility etc. to the people. The aim is not only to provide these fundamental facilities but also to make them available at cheaper rates.
Moreover, private entrepreneurs cannot be trusted as far as these basic amenities are concerned. After all, it’s a matter of survival of the nation. The chances of public misuse are more in these services. So, it is essential that only public undertakings offer these facilities. If private sector is given a free hand, industrialization can lead to the abuse of the customers.
The private businessmen only want to have more and more profit and hence try to concentrate a great amount of economic power in their hands. The existence of public sector is a check on the private sector. Private sector has to provide goods and services on a competitive basis.
It is also the duty of the government to effect equal development of every area under its domain. This is not possible in the case of private sector. Some industries are to be developed only in public sector like defense, nuclear energy and the like.
Author - DeeKay
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