Sectors in terms of Ownership


 
 
Concept Explanation
 

Sectors in terms of Ownership

Sectors In Terms Of Ownership: The economic activities can also be classified on the basis of ownership which means who owns the assets, and who is responsible for delivery of services. On the basis of ownership there are two sectors of the economy i.e. Public sector and Private sector.

Public and Private Sectors : In the public sector, government owns most of the assets and provides all the services therefore it is also called state sector or government sector. In the private sector, ownership of assets and delivery of services lie in the hands of individuals or private companies.

Both these sectors are involved in major activities of the economy, except some activities. All spheres of activities are open to either of them.

However, the public sector predominates in certain areas like mining, power generation, transport, healthcare, education etc, which belong to the infrastructure development or core activities.

The private sector predominates in agricultural and allied activities, manufacturing industries, manufacturing of goods, trade, hotel etc. Both sectors are seen in almost all fields.

Examples of private sector entities are Hindustan Unilever, Bajaj Auto, Tata Iron and Steel Company Limited (TISCO), Indian Hotels Company Limited etc.

Examples of public sector organisations are Indian Railways, Fertiliser Corporation of India Limited, Bharat Heavy Electricals Limited etc.

Profit Motives of Various Sectors: Private sector activities are centered around profit motives and service is of secondary importance. Public sector activities are determined by consideration of social welfare and providing basic amenities for the people. Here, profit motives are of secondary importance. 

Role of Government's Investment :-Infrastructure comprises development of transport, power, communication etc. Expenditure on development of infrastructure is known as social overhead cost. Developing infrastructure require huge money that private sector cannot do. So government have to undertake heavy spending.

Following are the work done by government sector

  • Development of the backward areas is another goal of the  public sector. If industries are set-up in the backward areas, the goal of minimising economic inequalities between regions will become easier to achieve. So, the  government finds it necessary to start industrial production in backward areas by itself.
  • Government encourages the private sector to engage more in business activities because it is not possible to provide organised employment to all people without the support of private sector.
  • Government also shares the burden of loss to specific industries, which provide base for other industries and other sectors of economy i.e. electricity generation. Government bears a part of the cost of production to make the service cheaper in the market and to sustain other small business activities.
  • Other activities which are primary responsibility of the government include:-

  • Providing health care Facilities to all .
  • Running proper schools and providing elementary education to all children,  as it is well known that india has a large number of illiterate people. 
  • Solving Other problems like malnutrition, high infant mortality Rate (IMR) , Unsafe drinking Water, lack of Housing etc . 
  • Some Poverty ridden States Like Odisha and Bihar have high IMR . Even Higher than poorest Regions of the world . So it is the duty of Government to Take Care of the Poorest and most ignored regions of the Country Through increased expenditure for this . 
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