Question

Explain with suitable examples how public sector contributes to the economic development of the nation.

Answer 1

• Creation of infrastructure: Public sector promotes the economic development since it brings about creation and expansion of infrastructure and the infrastructure plays an important role in economic development. 
• Generates financial resources: Public Sector provides for various employment opportunities since major part of public sector depends on fhanpower and higher employment opportunities implies higher generation of financial resources for economic development. 
• Contributes to HDI: Public sector majorly contributes to the Human Development Index since health and education industries come under the purview of public sector. 
• Availability of goods: Public sector helps in availability of goods at moderate rates, which helps in maintaining financial security and thus helps in economic development. 
• Provides encouragement: It provides encouragement to small, medium and cottage production units. It also strives for the creation of welfare state.