It has the following merits:
1. The private
enterprise has accumulated considerable amount of managerial,
organisational and technological expertise but is lacking in
sufficient financial resources. On the other hand, the public sector
in spite of its vast financial resources has shown disappointing
performance. Through the joint sector formula, the resources of the
two sectors can be combines.
2. Joint sector
enterprises would enjoy more operational autonomy and flexibility
within the frame work of the socio-economic policies of the
3. Joint sector is a useful weapon to curb
monopoly and concentration of economic power in the country. It is a
via media between outright nationalisation and free enterprise. The
idea of joint sector is appropriate to India's mixed economy wherein
growth and social justice are to be aimed at simultaneously.
However, joint sector can succeed only when there is
complete understanding, faith and co-operation between private and
public sector partners. A suitable system of management for the
joint sector must be evolved. The joint sector management should
have freedom necessary to run the enterprises on business principles.
At the same time public control must be maintained in the form of
Government representatives on the board of directors. If properly
managed, joint sector can be a viable alternative to both State
capitalism and private capitalism.