Trends in public and private sector in india

BY: Ashutosh Gupta Krishan Kumar TRENDS IN PUBLIC & PRIVATE SECTOR IN INDIA. TECNIA INSTITUTE OF ADVANCE STUDIES ROHINI, NEW DELHI Presentation On

We hereby acknowledge the fact that making of this presentation has given us knowledge about the topic “Trends in Public & Private Sector in India”. We are grateful to our Business Environment teacher who is also our Dean Academics Mr. Ajay K Rathore Sir for giving us an opportunity to prepare a presentation over this topic and the help he provided to us to complete this presentation successfully. And last but not the least We’re Thankful to our classmates for the cooperation they’ve extended to us in completion of this presentation.

CONTENTS: ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Private Sector A private sector enterprise is an organisation which is owned, managed & controlled by private individuals or a group of individuals or both. It is also engaged in business activity but with the motive of profit maximisation rather than public service like in case of public sector enterprise. ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Objectives of Public Sector Enterprise: ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Growth of Public Sector Undertakings Source: Business Environment by Francis Cherunilam (2008) Period Total Investment (Rs. Cr.) No. of Enterprises (Owned By Central Gov.) 1 st Plan (1951-1956) 29 5 2 nd Plan (1956-1961) 81 21 3 rd Plan (1961-1966) 953 48 Three Annual Plans (1966-69) 2410 73 4 th Plan (1969-1974) 3902 85 5 th Plan (1974-1979) 6237 122 6 th plan (1980-1985) 18225 186 7 th plan (1985-1990) 42811 221 8 th plan (1992-1997) 118492 237 9 th Plan (1997-2002) 201500 238 10 th Plan (2002-2007) 324632 240 11 th plan (2007-2012) 4,21,089 244

Reasons of growth of Public Sector ,[object Object],[object Object],[object Object],The Industrial Policy of 1956 is the basic policy of India. It was more of a restrictive in nature for setup of new private industries. The Public Sector flourished in the time being before the introduction of new Industrial Policy of 1991 which was more liberal in nature.

Share of Public Sector ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Source: Essentials Of Business Environment by K. Ashwathappa (10 th edition 2008) Six Indian Public Sector companies figure in the latest list of the 500 biggest industrial corporations, released by Fortune International. They are: Name of Company Ranking (Out of 500) Indian Oil Corporation 144 Oil & Natural Gas Corporation 278 Steel Authority of India Ltd. 332 Hindustan Petroleum Corp. Ltd 371 Coal India Ltd. 371 Bharat Petroleum Corp. Ltd 474

Performance of Central Public Sector Enterprises, during April-September, 2006 Sl. No. Industry GDP Nominal Growth During April-September 2005 2006 Rate 1. Agriculture, forestry and fishing 253839 277668 9.39 2. Mining and quarrying 37935 43487 14.65 3. Manufacturing 242452 278986 15.07 4. Electricity, gas and water supply 32933 35608 8.12 5. Construction 101494 116667 14.95

Performance of CPSEs, during April-September, 2006 6. Trade, hotels, transport and communication 366780 426935 16.40 7. Financing, insurance, real estate and business Services 222882 254923 14.38 8. Community, social and personal services 211655 239039 12.94 GDP at factor cost 1469970 1673313 13.83

Objectives of private sector enterprise: ,[object Object],[object Object],[object Object],[object Object],The government resorts to privatisation with the multiple objectives which are as follows:

Growth of Private Corporate Sector Note: Figures in brackets are percentage of total paid-up capital Source: Tata Services Ltd, Statistical Outline of India (2001-2002) 1957 1971 2000 No. of Companies 29,357 30,322 5,42,308 ,[object Object],74 314 1,257 ,[object Object],29,283 30,008 5,41,051 Paid Up capital (Rs. Cr.) All Companies 1,080 4,500 2,67,898 (100.00) (100.00) (100.00) Government Companies 70 2,060 95,842 (6.8) (45.8) (35.8) Private 1,010 2,440 1,72,056 Companies (93.2) (54.2) (64.2)

Reasons for Growth of Private Sector ,[object Object],[object Object],[object Object],[object Object],[object Object]

Share of Private Sector ,[object Object],[object Object]

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Top 10 Private Sector Companies in 2008

Comparisons ,[object Object],[object Object],[object Object],[object Object]

(As a %age of GDP) SECTOR-WISE DOMESTIC SAVINGS Years Household Sector Private Sector Public Sector Gross Domestic Savings 1 2 3 4 5 New Series (Base: 1999-2000) 1950 5.7 0.9 2.0 8.6 1955 9.0 1.2 2.1 12.3 1960 6.5 1.6 3.1 11.2 1965 8.6 1.4 3.6 13.7 1970 9.5 1.5 3.3 14.2 1975 10.9 1.3 4.7 16.9 1980 12.9 1.6 4.0 18.5 1985 13.1 1.9 3.9 19.0 1990 18.4 2.7 1.8 22.8 1995 16.9 5.0 2.6 24.4 2000 21.6 3.9 -1.8 23.7 2005 24.2 7.5 2.6 34.3 2007 23.8 7.8 3.2 34.8

(As a %age of GDP) SECTOR-WISE GROSS CAPITAL FORMATION Year Public Corporate Sector Private Corporate Sector Gross Capital Formation 1 2 3 4 (BASE : 1999-2000) 1950 2.6 6.1 8.7 1955 5.4 6.3 11.7 1960 6.7 5.8 12.5 1965 8.1 6.9 14.9 1970 5.8 7.9 13.8 1975 7.4 8.6 16.1 1980 8.9 9.5 18.4 1985 10.7 9.7 20.4 1990 9.6 13.4 23.0 1995 8.3 16.2 24.4 2000 6.5 16.3 22.7 2005 7.0 24.0 31.0 2007 7.4 25.0 32.5

EMPLOYMENT IN PUBLIC AND ORGANISED PRIVATE SECTORS Years Public Sector Private Sector end march end march 1981 154.8 74.0 1991 190.6 76.8 1995 194.7 80.6 2000 193.1 86.5 2002 187.7 84.3 2003 185.8 84.2 2004 181.9 82.5 2005 180.1 84.5 2006 181.9 87.7 In Lakhs

At Current Price Share of Public & Private Sector in Net Domestic Product (Rs. Crores at 1993-94 prices) S. No Industry Public Sector Private Sector Total 1 Agriculture, Forestry & Fishing 4,549 2,70,309 2,74,858 (1.7) (98.3) (100.0) 2 Mining & Quarrying 16,785 3,863 20,645 (81.3) (18.7) (100.0) 3 Manufacturing 21,106 1,27,015 1,48,121 (14.2) (85.8) (100.0) 4 Electricity, Gas & Water 18,487 -3,878 14,609 (126.5) (-26.5) (100.0) 5 Construction 9,607 46,089 55,696 (17.2) (82.8) (100.0)

Continued: Sr. No Industry Public Sector Private sector Total 6 Trade, Hotel & Restaurants 5,267 1,58,797 1,64,064 (3.2) (96.8) (100.0) 7 Transport, Storage & Communications 36,044 30,066 66,110 (54.5) (45.5) (100.0) 8 Finance, Insurance, Real Estate & Business Services 47,074 84,453 1,31,527 (35.8) (64.2) (100.0) 9 Community, Social & Personal Services 95,509 48,203 1,43,712 (66.5) (33.5) (100.0) Total 2,54,428 7,64,917 10,19,345 (25.0) (75.0) (100.0)

Defects in Public Sector Enterprises: Leading to Privatisation ,[object Object],[object Object],[object Object],These problems have led many governments to undertake programs of public sector reform, and pushed by a need to curb public expenditure, to revaluate the possibilities for shifting publicly managed activities into the private sector.

Defects of Privatisation: ,[object Object],[object Object],[object Object],[object Object]

Positive effects of the growth of private sector in India ,[object Object],[object Object],[object Object],[object Object],[object Object]

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Conclusion ,[object Object],[object Object],[object Object],[object Object]

Continued: ,[object Object],[object Object]

References: ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Trends in public and private sector in india

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