Public Enterprises Essay Example for Free

mankind Enterprises EssayWhat argon the Objectives of existence Enterprises? SOUMYA SINGH In India, human beings enterprises stir been assigned the task of realising the objectives laid down in the Directive Principles of State Policy. mankind vault of heaven as a whole seeks (a) to gain control of the domineering heights of the economy, (b) to promote critical development in terms of social gain or strategic value rather than on consideration of profit, and (c) to brook commercial surplus with which to finance further economic development. The main objectives of usual enterprises in India ar as follows 1. Economic development globe enterprises were set up to accelerate the rate of economic growth in a planned manner. These enterprises project created a sound industrial base for rapid industrialisation of the country. They are expected to provide infrastructure facilities for promoting commensuratenessd and diversified economic structure of development. 2. Self-relia nce A nonher aim of public enterprises is to promote self-reliance in strategic welkins of the national economy. For this purpose, public enterprises have been set up in transportation, communication, energy, petro-chemicals, and other key and basic industries. . tuition of backward Areas Several public enterprises were established in backward areas to reduce regional imbalances in development. Balanced development of different parts of the country is necessary for social as well as strategic reasons. 4. Employment generation Un workout has become a serious problem in India. Public enterprises seek to offer gainful employment to millions. In order to value jobs, several sick units in the clannish sector have been nationalised. 5. Economic surplus Public enterprises seek to generate and mobilise surplus for re enthronisation.These enterprises earn silver and mobilise public savings for industrial development. 6. Egalitarian society An important objective of public enterprises is to prevent concentration of economic power and growth of private monopolies. Public sector helps the g overnment to enforce social control on trade and industry for ensuring equitable distribution of goods and services. Public enterprises protect and promote itty-bitty scale industries. 7. Consumer welfare Public enterprises seek to protect consumers from exploitation and profiteering by ensuring issue of essential commodities at cheaper prices.They aim at stabilising prices. 8. Public utilities occult sector is guided by profit motive. Therefore, it is reluctant to invest money in public utility services like water supply, gas, electricity, public transport. Therefore, the Government has to assume responsibility for providing such services. 9. Defence Government has to set up public enterprises for production of defence equipment. Supply of such equipment cannot be entrusted for private sector due to the need for utmost secrecy. 10. Labour welfare Public enterprises serve as m odel employers.They ensure welfare and social security of employees. Many public enterprises have developed townships, schools, college and hospitals for their workers. Role and Rationale of Public Enterprises The public sector has been playing a vital role in the economic development of the country. In fact the public sector has come to occupy such an important place in our economy that on its effective performance depends largely the act of the countrys economic and social goals. Public sector is considered a powerful engine of economic development and an important peter of self-reliance.The main contributions of public enterprises to the countrys economy may be described as follows 1. Filling of gaps At the time of independence, there existed serious gaps in the industrial structure of the country, particularly in the field of arduous industries. Basic and key industries require huge capital investment, involve considerable risk and suffer from long gestation periods. Private sector concerns do not come forward to establish such industries. Public sector has helped to fill up these gaps. The basic infrastructure required for rapid industrialisation has been built up, through the production of strategic capital goods.The public sector has considerably widened the industrial base of the country and speeded up the pace of industrialisation. 2. Employment Public sector has created millions of jobs to swindle the unemployment problem in the country. Public sector accounts for about two-third of the total employment in the organised industrial sector in India. By taking over many sick units, the public sector has protected the employment of millions. Public sector has also contributed a lot towards the improvement of working and living conditions of workers by serving as a model employer. 3. Balanced regional developmentPrivate industries tend to concentrate in certain regions while other regions persevere backward. Public sector undertakings have located their plants in backward and untraded parts of the country. These areas wished basic industrial and civic facilities like electricity, water supply, township and manpower. Public enterprises have developed these facilities thereby bringing about complete transformation in the social-economic life of the people in these regions. Steel plants of Bhilai, Rourkela and Durgapur fertilizer factory at Sindri, instrument tool plants in Rajasthan, precision instruments plants in Kerala and Rajasthan, etc. are a few examples of the development of backward regions by the public sector. 4. Optimum utilisation of resources Public enterprises make better utilisation of scarce resources of the country. They are big in size and able to enjoy the benefits of large scale operations. They help to eliminate inefficient completion and ensure full use of installed electrical capacity. Optimum utilisation of resources results in better and cheaper production. 5. Mobilisation of surplus The profits ear ned by public enterprises are reinvested for magnification and diversification. Moreover, public sector concerns like banks and monetary nstitutions mobilise scattered public savings thereby helping the process of capital formation in the country. Public enterprises earn considerable foreign exchange through exports. 6. Self reliance Public enterprises have reduced considerably the need for imports by producing unexampled and better products within the country. These enterprises are also earning considerable amount of foreign exchange through exports. 7. Socialistic pattern of society Public sector is an instrument for realising social objectives. Public enterprises help to check concentration of wealth and private monopolies.These enterprises can serve as powerful means of economic and social change. 8. Public welfare Public enterprises help in the creation of a welfare state in the country. These enterprises supply essential commodities at cheaper rates. A proper balance betwe en demand and supply is created to protect consumers against exploitation by profit hungry businessmen. Public enterprises also protect and promote the interests of workers. Criticism of Public Enterprises Arguments against Public Enterprises Public enterprises are opposed on account of weaknesses in their organisation and working.These enterprises generally suffer from the following problems 1. Delay in completion Often a very long time is taken in the establishment and completion of public enterprises. Delay in completion leads to increase in the cost of establishment and benefits extracted from them are delayed. 2. Faulty evaluation Public enterprises are in some cases set upon political considerations. There is no proper evaluation of demand and supply and expected costs and benefits. There are no clear cut objectives and guidelines. In the absence of proper project planning there is under- utilisation of capacity and wastage of national resources. . Heavy overhead costs Public enterprises often spend huge amounts on providing housing and other amenities to employees. Though such investment is useful for employees but it takes away a large part of capital and the project suffers from financial difficulties. 4. Poor returns Majority of the public enterprises in India are subject loss. In some of them the profits earned do not yield a reasonable return on huge investment. Lack of effective financial controls, wasteful expenditure and dogmatic pricing policy result in losses 5. Inefficient managementDue to excessive centralisation of authority and lack of motivation public enterprises are managed inefficiently. High level posts are often occupied by persons lacking necessary expertise but enjoying political support. 6. semipolitical interference There is frequent interference from politicians and civil servants in the working of public enterprises. Such interference leaves little scope for initiative and freedom of action. Public enterprises enjoy little au tonomy and flexibility of operations. 7. Labour problems In the absence of proper manpower planning public enterprises suffer from over-staffing.Jobs are created to fulfil employment goals of the Government. Guarantee of job in these enterprises encourages trade unions to be militant in pursuing their aims. Growth of Public Enterprises in India At the time of independence, public sector in India was confined mainly to railways, communications, defence production and public utility services. Since then the growth of public enterprises has been very rapid. Now public sector consists of public utilities (e. g. , railways, post and telegraph, etc), manufacturing concerns (e. g. , BHEL, SAIL, etc. ), trading organisations (e. g. STC, MMTC, etc. ), service organisations (e. g. , NIDC, RITES, etc. ). SAIL, a Maharatna Company of Govt. of India, is the worlds leading and Indias largest steel producer with an annual turnover of around Rs. 50,348 crore (FY11-12). It operates and owns 5 integr ated steel plants at Rourkela, Bhilai, Durgapur, Bokaro and Burnpur and 3 special steel plants at Salem, Durgapur and Bhadravati. As part of its global ambition the Company is implementing a massive expansion plan involving project work of building/adding new facilites with emphasis on state of the art green technology.List of Maharatna, Navratna and Miniratna CPSEs As per available information (as on February, 2013) Maharatna CPSEs Bharat Heavy Electricals restrain Coal India hold GAIL (India) particular(a) Indian Oil stomach control NTPC control Oil amp Natural Gas potentiometer express Steel Authority of India trammel Navratna CPSEs Bharat Electronics Limited Bharat Petroleum Corporation Limited Hindustan Aeronautics Limited Hindustan Petroleum Corporation Limited Mahanagar Telephone Nigam Limited National Aluminium Company Limited NMDC Limited Neyveli Lignite Corporation Limited Oil India Limited role Finance Corporation Limited Power Grid Corporation of India Limited R ashtriya Ispat Nigam Limited Rural Electrification Corporation Limited Shipping Corporation of India Limited Miniratna Category I CPSEs Airports Authority of India Antrix Corporation Limited Balmer Lawrie amp Co. Limited Bharat Dynamics Limited BEML Limited Bharat Sanchar Nigam Limited Bridge amp Roof Company (India) Limited central Warehousing Corporation Central Coalfields Limited Chennai Petroleum Corporation Limited Cochin Shipyard Limited Container Corporation of India Limited Dredging Corporation of India LimitedEngineers India Limited Ennore Port Limited Garden obtain Shipbuilders amp Engineers Limited Goa Shipyard Limited Hindustan Copper Limited HLL Lifecare Limited Hindustan Newsprint Limited Hindustan Paper Corporation Limited Housing amp Urban Development Corporation Limited India Tourism Development Corporation Limited Indian Railway Catering amp Tourism Corporation Limited IRCON International Limited KIOCL Limited Mazagaon Dock Limited Mahanadi Coalfields Limited Ma nganese Ore (India) Limited Mangalore Refinery amp Petrochemical Limited Mishra Dhatu Nigam Limited MMTC Limited MSTC LimitedNational Fertilizers Limited National Seeds Corporation Limited NHPC Limited Northern Coalfields Limited Numaligarh Refinery Limited ONGC Videsh Limited Pawan Hans Helicopters Limited Projects amp Development India Limited Railtel Corporation of India Limited Rashtriya Chemicals amp Fertilizers Limited RITES Limited SJVN Limited Security Printing and Minting Corporation of India Limited South Eastern Coalfields Limited State Trading Corporation of India Limited Telecommunications Consultants India Limited THDC India Limited western Coalfields Limited WAPCOS Limited Miniratna Category-II CPSEsBharat Pumps amp Compressors Limited Broadcast Engineering Consultants (I) Limited Central Mine Planning amp Design Institute Limited Ed. CIL (India) Limited Engineering Projects (India) Limited FCI Aravali Gypsum amp Minerals India Limited Ferro Scrap Nigam Limited HMT ( International) Limited HSCC (India) Limited India Trade Promotion Organisation Indian Medicines amp Pharmaceuticals Corporation Limited M E C O N Limited National Film Development Corporation Limited National Small Industries Corporation Limited P E C Limited Rajasthan Electronics amp Instruments Limited