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Role Of Public Sector In India
The public sector has been playing a vital role in the economic development of the country. In fact the public sector has come to occupy such an important place in our economy, that on its effective performance depends largely the achievement of the country's economic n social goals.


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Public sector is considered a powerful engine of economic development and an important instrument of self-reliance. The main contributions of public enterprises to the country's economy maybe described as follows:

1. Fillings of Gaps: At the time of independence, there existed serious gaps in the industrial structure of the country, particularly in the fields of heavy industries such as steel heavy, machine tools, exploration an refining of oil, heavy Electrical and equipment, chemicals and fertilizers, defense equipment, etc. Public sector has helped to fill up these gaps. The basic infrastructure required for rapid industrialisation has been built up, through the production of strategic capital goods. The public sector has considerably widened the industrial base of the country.

2. Employment: Public sector has created millions of jobs to tackle the unemployment problem in the country. Public sector accounts for about two-thirds of the total employment in the organised industrial sector in India. By taking over many sick units, the public sector has protected the employment of millions. Public sector has also contributed a lot towards the improvement of working and living conditions of workers by serving as a model employer.

3. Balanced Regional Development: Public sector undertakings have located their plants in backward and untrodden parts of the county. There area lacked basic industrial and civic facilities like electricity, water supply, township an manpower. Public enterprises have developed these facilities thereby brining about complete transformation in the socioeconomic life of the people in these regions. Steel plants of Bhilai, Rourkela and Durgapur; fertilizer factory at Sindri, Machine Tool plants in Rajasthan, Precision Instruments plants in Kerla and Rajasthan, etc. are a few examples of the development of backward regions by the public sector.

4. Contribution to Public Exchequer: In recent years, the public sector has made increasing contributions to the public sector in the form of dividend, corporate taxes, excise and customs duty, etc. The total contribution from the public enterprises to the Exchequer increased from Rs. 11,074 crores in 1982-83 to Rs. 23, 972 crores in 1986-87.

5. Foreign Exchange Earnings: Public sector has contributed a great deal in improving the balance of payments position of the county. The public enterprises have saved valuable foreign exchange trough import substitution. Public enterprises have earned foreign exchange of Rs. 3,942 crores during 1986-87 by way of exports.

6. Development of Ancillary industries: In order to encourage the development of small scale and medium-sized industries in the country, the Government of India has launched a national programme. Public sector ha contributed to this programme by fostering the growth of ancillary industries and satellite planets. Such plants have been established around the major public sector undertakings. There is a strong base of ancillary industries at several centers such as the Bokaro Industrial Complex, the Bhilai Steel Plant, The Rourkela Steel Complex, the Heavy Engineering Corporation at Ranchi, Hindustan Machine Tools at Bangalore, and the units of Bharat Heavy Electrical at Bhopal, Hyderabad and Hardwar.

7. Research and Development: As most of the public enterprises are engaged in high technology and heavy industries, they have undertaken research and development programmes in a big way. Public sector has laid strong and wide base for self-reliance in the field of technical know-how, maintenance and repair of sophisticated industrial plants, machinery and equipment in the country. Through the development of technological skill, public enterprises have reduced dependence on foreign knowhow. With the help of the technological capability, public sector undertakings have successfully competed in the international market an they have secured turnkey projects in several countries of the world.

8. Community Development: Several public sector undertakings have developed townships to provide all the civic amenities to their employees. These townships consists of houses, etc. Public enterprises have constructed roads and other infrastructural facility to link these townships to other parts of the country. Such townships have been very helpful in improving community life.

9. Social Justice : Public enterprises have contributed towards the achievement of constitutional objectives. They have been helpful in reducing the concentration of economic power in private hands, in curbing anti-social monopolies, in accelerating public control over the national economy and in bringing about a socialistic pattern of society.

In addition to the foregoing, the public sector has played an important role in the achievement of constitutional goals like reducing concentration of economic power in private hands, increasing public control over the national economy, creating a socialistic pattern of society, etc. With all its linkages the public sector has made solid contributions to national self-reliance.

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