Role of Public Sector in the Economic Development

You know that all enterprises in our country are not public enterprises. There is mixed
economy in our country and the private as well as the public sector contribute to the
development of our economy. However, there are only some selected areas in which the
government establishes its enterprises for a balanced development of the economy and
promote public welfare. There are several areas where huge investment of capital is
necessary but the margin of profit is either meager or it can be obtained only after a long
period as in case of generation and supply of electricity, machine building, construction of
dams, etc. The private businessmen hesitate to establish their enterprises in these areas but
they cannot be neglected in public interest. As such these enterprises are established and
run by the government. Similarly the public enterprises also help in balanced regional
development by promoting industries in every part of the country. For example, with the
establishment of Bhilai Steel Plant in Madhya Pradesh, several new small industries have
come up in that state.
Industrial progress is of utmost importance for the development of the country and for this,
it is necessary that some basic industries like oil, coal, gas, iron, steel, production of heavy
electrical goods, etc., are to be fully developed. Public enterprises give impetus to the
development of these basic industries and also help in the development of the private
sector with their products and services. There are some industries which require heavy
capital investment on account of technical reasons. Electricity, power, production of gas,
heavy machinery tools, production of telephone etc., are such industries.
The development of public enterprises also prevents concentration of economic power in
the hands of an individual, or a group of individuals. Not only that, in our country economic
inequalities are increasing. Poor are becoming poorer and the rich more rich. The public
enterprises can help in reducing inequalities with the help of various policies like utilising
the earned profits in public welfare activities and by selling raw material to the small scale
industries at lower prices.
It is also necessary for the economic progress of the country that industries which can
decrease imports and increase exports are only promoted. Public enterprises also ensure
promotion of such industries.
There is an old belief that the benefits derived from the nature should be made available to
all without any distinction. The public enterprises ensure that land, oil, coal, gas, water,
electricity and other necessary resources are made available to all at fair prices.
The security of the country is supreme. There should be no compromise in ensuring this.
The production of fighter aeroplanes, arms and ammunition etc, connected with the security
of the country is put under the domain of Public Enterprises for the purpose. Thus, public
welfare, planned economic development of the country, regional balance, import substitution
and checking concentration of economic powers are the major goals achieved through
public enterprises.