Question

Though 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?

Answer 1

Usefulness of public sector undertakings: 

There is no doubt that manypublic sector undertakings are incurring huge losses and are a drain on the country’s resources. Inspite of this, they are very useful due to following reasons:

• They create a strong industrial base.
• They prevent contraction of economic power.
• They help in the development of backward areas. 
• They seek to develop infrastructure.
• They provide employment.
• They promote import substitution.
• They promote equality of income and wealth distribution.
• They seek to remove regional imbalance in growth.