Growth Of Public Enterprises

University:
California State University, Northridge
Course:
BUS 104 | Introduction to Business
Academic year:

2023
Views:

465

Pages:

1
Author:

JJIssac

GROWTH OF PUBLIC ENTERPRISES - Needed redefinition of role in tune with liberalization. Policy Changes Since 1991 - Public sector assigned a key role in industrialization even before planning era as per Industrial Policy Resolution 1948. - Phenomenal growth seen after commencement of planning. - Investment in Central PSEs grew from Rs 29 crore in 1951 to over Rs 10 lakh crore by 2015. - Massive growth in sectors like steel, coal, power, petroleum. Dominant position attained in several core industries. Growth driven by setting up new units and nationalization of some private units. Performance - Played crucial role in developing economy lacking capital and skills. - But performance of many PSEs unsatisfactory. - Problems like cost and time overruns, irrational product mix, lack of autonomy etc affected efficiency. - Many PSEs incurred huge losses, while profits came from monopolies. - Inadequate internal resource generation due to pricing constraints, long gestation periods etc. - Pruning of industries reserved for public sector. Now only 2 left. - Withdrawal from non-priority sectors lacking public purpose. - Grant of autonomy to profitable PSUs (Navratnas, Miniratnas). - Disinvestment and strategic sale of non-strategic PSUs. - Closure PSUs. - Ensure PSUs run on business lines. of non-viable sick Forms of Public Enterprises - Ministry (Railways) - Departmental Undertakings - Government Companies - Statutory Corporations Conclusion - Public sector played important developmental role. - But reforms needed to improve efficiency and competitiveness. - Changes since 1991 have aimed at more commercial orientation.