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Objectives of public Enterprises
The main objectives of public enterprises are as follows


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1. To stimulate economic growth: The basic purpose of setting up public enterprises is to accelerate the pace of economic development in the country. Public enterprises provide the basic infrastructural facilities for rapid industrialization. That is why the Government of India has st up units in various sectors like electricity generation, transportation and communication network, machine building, fertilizers, petro-chemicals, pesticides, river valley projects, etc. These enterprises have filled up critical gaps in the country's industrial structure.

2. To mobilise public savings: A high rate of savings and capital formation is essential for rapid economic growth. The Government has nationalized commercial banks and insurance companies to direct public savings in productive channels. Moreover, several term lending institutions have been set up to provide finance to industries both in private and public sectors.

3. To provide employment: As a welfare State, the Government has assumed the responsibility of providing gainful employment to more and more people. In order to protect employment of a large number of persons, the Government has often taken over sick and mismanaged units in the private sectors. It has set up several undertakings to create larger employment opportunities.

4. To control monopoly: The existence of a large and expanding private sector results in the growth of private monopolists. Therefore, the Government has reserved certain basic and strategic sectors exclusively for public enterprises. In order sectors public enterprises offer competition and theory prevent the emergence of private monopolies.

5. To establish an egalitarian society: An important goal of h public sector is to reduce disparities in the distribution of income and wealth. Such diffusion of economic power helps to establish an egalitarian order in the society. Therefore, the public sector was designed to control the 'commanding heights' of the economy.


6. To conserve national resources : Public enterprises have also been set up to ensure proper utilisation and conservation of natural resources. For example, the coal mines ere nationalized to protect, conserve and promote scientific mining and to prevent indiscriminate slaughter mining.

7. To stimulate research and development: The foundation and tempo of economic development is based upon technology. Technological inventions and innovations require substantial investment of funds and development of scientific talent. Public enterprises alone can afford such investment which do not give direct and immediate monetary gains. The Government has st up several institutions to undertake research an development on a large scale.

The foregoing objectives of public enterprises may be divided into three categories, namely (a) economic objectives : to stimulate economic growth, to mobilise public savings, to develop sound industrial base, to ensure balanced regional development, etc; (b) social objectives: to generate employment, to create egalitarian society, to control monopoly, to provide essential commodities; and (c) political objectives : to conserve and develop national resources, to ensure national defense, to safeguard national priorities etc.

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