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Public & Private Sectors (3. Activities that are the primary…
Public & Private Sectors
Public Sector
The government owns most of the assets and provides all the services
Eg: Railways, post office
The public sector companies have other goals besides making profit
These needs are not met by private sector at a reasonable cost
They spend on a wide range of things needed by the society
Government raises money mainly through taxes
Private Sector
Private individuals or companies owns the assets and provides all the services
Eg: TISCO & RIL. Tata Iron and Steel Company & Reliance Industries Limited
The main aim of private sector companies is to make profit
1.Activities that require high spending
Some of these activities need spending large amounts, which is beyond the capacity of the private sector
The government has to undertake such heavy spending and provide facilities to people at reasonable cost
Eg: Construction of roads, bridges, railways, harbours, generating electricity, construction of dams
2. Activities that Govt has to Support
Sometimes private sector may not continue their business unless the government encourages it
Eg1: If electricity is sold at the cost of production, the expense will be too high for small scale industries
So the government has to bear the cost and supply electricity at reduced rates to support small scale industries
Eg 2: The Government of India buys wheat & rice from the farmers at a "fair price" to promote farming
It is then stored in godowns & the government sells it at lower price to consumers through ration shops
By bearing the cost, the government supports the farmers & the consumers
3. Activities that are the primary responsibility of the Govt
The Government must spend on activities that are its primary responsibility
They have to provide educational & health facilities for everyone
Eg1: Illiteracy is very high in India
It is the duty of the government to run schools & provide quality education, especially elementary education
Eg 2: Half of India's children are malnourished & a quarter of them are critically ill
Infant mortality rate is 53 in Odisha & 56 in Madhya Pradesh. This is higher than some of the poorest regions in the world
The government has to provide safe drinking water, housing & food for the poor
It is the duty of the government to take care of the poorest & most ignored regions of the country through increased spending in these areas