What is Public Sector?
“State governments gradually started realizing their social responsibilities towards people of their nation. The outcome of all these factors was the active participation of government in industrial and commercial enterprises. ”
To put it in very simple terms, Public Sector means that the government of a nation establishes industry and performs commercial actions. Public enterprises as a form of business organization have gained importance only in recent times. It was only during the 20th century that various governments started participating in industrial and commercial activities at a large and well-planned scale.Earlier the role of government was limited only to the maintenance of law and order. It was thought that businessmen are more adept at understanding the activities related to business and commerce.
The policy of laissez faire was practacised in most of the countries. The development of the industry was left to the judgment of private entrepreneurs.
Various happenings of significance in the 20th century like, outbreak of two world wars, depression in many countries, social ills of industrial revolutions of earlier times etc. forced many nations to indulge in the planning and development of the industrial structure of their respective countries.
Moreover, over time, the private entrepreneurs had started working only for profit motive. The exploitation of consumer and workers by private owners became the order of the day and the economic divide between various sections of people grew even wider.
Then came the Russian revolution that gave way to a new economic and political system in the world. People began to realize that this earth is not the property of only the selected few; rather all have equal right over it and its resources. This acquisition of resources like land, property etc. goes a long way in determining the clash between various sections of the society.
State governments gradually started realizing their social responsibilities towards people of their nation. The outcome of all these factors was the active participation of government in industrial and commercial enterprises.
At present, governments of all countries in the world participate in the economic activities of their respective countries in one or the other way. Private sector is hesitant to develop those industries where heavy investments are required and the gestation period is long. Moreover, government initiative in this sector is aimed at preventing concentration of capital in a few hands.
Author - DeeKay
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