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
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
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
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
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.
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.
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.
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
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
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.