Though the public sector is very essential for industries, many public sector undertakings incur huge losses and are a drain on the economy’s resources. Discuss the usefulness of public sector undertakings in the light of this fact.
Although, the mismanagement and wrong planning in PSUs may lead to misallocation and, consequently, to wastage of the scarce resources and finance but PSUs do have some positive and useful advantages.
1. Enhancing Nation's Welfare: The main motive of the PSU was to provide goods and services that add to the welfare of the country as a whole. For example, schools, hospitals, electricity, etc. These services not only enhance the welfare of the country's population but also enhance the future prospects of economic growth and development.
2. Long Gestation Projects: It was not feasible and economically viable for the private sectors to invest in the big and wide projects like basic industries and electricity, railways, roads, etc. This is because these projects need a very huge initial investment and have a long gestation period. Hence, PSU is the most appropriate to invest in these projects.
3. Basic Framework: An important ideology that was inherited in the initial five year plans was that the public sector should lay down the basic framework for industrialisation that would encourage the private sector at the latter stage of industrialisation.
4. Socialist Track: In the initial years after independence, Indian planners and thinkers were more inclined towards socialist patterns. It was justified on the rational ground that if the government controls the productive resources and production, then it won't mislead the country's economic growth. This was the basic rationale to set up PSUs. These PSUs produce goods not according to the price signals but according to the social needs and economic welfare growth of the country.
5. Reduce Inequality of Income and Generate Employment Opportunities: It was assumed that in order to reduce inequalities of income, eradicate poverty and to raise the standard of living, the government sector should invest in the economy via PSUs.
Compare and contrast the development of India, China and Pakistan with respect to some salient human development indicators.
How is RBI controlling the commercial banks?
Explain the steps taken by the government in developing rural markets.
What are the functions of the environment?
Distinguish between the following
(i) Strategic and Minority sale
(ii) Bilateral and Multi-lateral trade
(iii) Tariff and Non-tariff barriers.
Why was the public sector given a leading role in industrial development during the planning period?
Match the following:
1. Prime Minister 3. Quota 4. Land Reforms 5. HYV Seeds 6. Subsidy |
A. Seeds that give large proportion of output C. Chairperson of the planning commission D. The money value of all the final goods and services produced within the economy in one year. E. Improvements in the field of agriculture to increase its productivity F. The monetary assistance given by government for production activities. |
Infrastructure contributes to the economic development of a country. Do you agree? Explain.
Find the odd man out (i) owner of a saloon (ii) a cobbler (iii) a cashier in Mother Dairy (iv) a tuition master (v) transport operator (vi) construction worker.
Highlight any two serious adverse environmental consequences of development in India. India’s environmental problems pose a dichotomy — they are poverty induced and, at the same time, due to affluence in living standards — is this true?
What are the indicators of educational achievement in a country?
What is the important implication of the ‘one child norm’ in China?
Why did India opt for planning?
What is the sectoral composition of an economy? Is it necessary that the service sector should contribute maximum to the GDP of an economy? Comment.
Critically appraise some of the shortfalls of the industrial policy pursued by the British colonial administration.
What was the focus of the economic policies pursued by the colonial government in India? What were the impacts of these policies?
What are the three basic sources of generating power?
Why are tariffs imposed?
Illustrate the difference between rural and urban poverty. Is it correct to say that poverty has shifted from rural to urban areas? Use the trends in poverty ratio to support your answer.
Examine the role of education in the economic development of a nation.