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Questions and Answers
What type of enterprises may be either partly or wholly owned by the government?
What type of enterprises may be either partly or wholly owned by the government?
- Private sector enterprises
- Cooperative societies
- Public sector units (correct)
- Global enterprises
Which Industrial Policy Resolution specifically defined the roles of the private and public sectors?
Which Industrial Policy Resolution specifically defined the roles of the private and public sectors?
- Industrial Policy Resolution 1948 (correct)
- Industrial Policy Resolution 1956
- Industrial Policy Resolution 1978
- Industrial Policy Resolution 1965
What is a significant challenge in organizing public sector enterprises?
What is a significant challenge in organizing public sector enterprises?
- Determining the form of organization (correct)
- Setting profit margin goals
- Choosing the right leadership style
- Deciding the ownership percentage
How does the government participate in economic activities?
How does the government participate in economic activities?
What is the role of government in the formation of the public sector?
What is the role of government in the formation of the public sector?
What differentiates a public sector enterprise from a private sector enterprise?
What differentiates a public sector enterprise from a private sector enterprise?
In what manner does the government act through its involvement in the public sector?
In what manner does the government act through its involvement in the public sector?
What is a common framework necessary for both the private and public sectors to function?
What is a common framework necessary for both the private and public sectors to function?
What was the main focus of the 1991 industrial policy?
What was the main focus of the 1991 industrial policy?
How are public enterprises primarily characterized?
How are public enterprises primarily characterized?
Which of the following forms are included under public enterprises?
Which of the following forms are included under public enterprises?
What role do public enterprises play in the economy?
What role do public enterprises play in the economy?
What does mutual dependency between public and private sectors imply?
What does mutual dependency between public and private sectors imply?
What is a key expectation from public enterprises in today's economy?
What is a key expectation from public enterprises in today's economy?
Which type of ownership is associated with public enterprises?
Which type of ownership is associated with public enterprises?
What did the government emphasize regarding foreign direct investment?
What did the government emphasize regarding foreign direct investment?
What was a primary role expected of public sector enterprises at the time of Independence?
What was a primary role expected of public sector enterprises at the time of Independence?
What happens if a public sector unit was making continuous losses?
What happens if a public sector unit was making continuous losses?
In what manner is a public sector company accountable for its performance?
In what manner is a public sector company accountable for its performance?
How does the Companies Act relate to public sector enterprises?
How does the Companies Act relate to public sector enterprises?
How is the management and administration of a government-owned company structured?
How is the management and administration of a government-owned company structured?
What was one of the expectations of public sector units regarding their role in the economy?
What was one of the expectations of public sector units regarding their role in the economy?
Which of these statements highlights a misconception about the public sector role?
Which of these statements highlights a misconception about the public sector role?
What characterized the expectations of public sector enterprises in the early 1960s and 70s compared to now?
What characterized the expectations of public sector enterprises in the early 1960s and 70s compared to now?
What was the government’s approach to industrial development after 1951?
What was the government’s approach to industrial development after 1951?
How did the concentration of wealth occur in the private sector?
How did the concentration of wealth occur in the private sector?
Which of the following was NOT one of the three industries exclusively reserved for the public sector in 2001?
Which of the following was NOT one of the three industries exclusively reserved for the public sector in 2001?
What was one major economic challenge India faced during its industrial planning?
What was one major economic challenge India faced during its industrial planning?
What effect did public sector involvement have on wealth distribution?
What effect did public sector involvement have on wealth distribution?
What change occurred in the number of industries reserved for the public sector from 1956 to 1991?
What change occurred in the number of industries reserved for the public sector from 1956 to 1991?
What strategy did India adopt during the second and third Five Year Plan periods?
What strategy did India adopt during the second and third Five Year Plan periods?
What main benefit did the public sector's involvement provide?
What main benefit did the public sector's involvement provide?
What role was the public sector expected to play in the market?
What role was the public sector expected to play in the market?
Which of the following is essential for sustainable industrialization?
Which of the following is essential for sustainable industrialization?
What is one major objective of planned development by the government?
What is one major objective of planned development by the government?
Why is the public sector necessary for industries requiring huge capital outlay?
Why is the public sector necessary for industries requiring huge capital outlay?
How does the public sector function as a check on economic power?
How does the public sector function as a check on economic power?
What was the aim of India during the second and third Five Year Plan period?
What was the aim of India during the second and third Five Year Plan period?
What did the government do to prevent economic imbalance in developed and backward regions?
What did the government do to prevent economic imbalance in developed and backward regions?
What is import substitution as discussed in the content?
What is import substitution as discussed in the content?
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Study Notes
Multinational Corporations and Public Sector
- Multinational corporations operate across borders and may be partly or wholly owned by government entities.
- Public sector units exist alongside private sector enterprises and global enterprises within the Indian economy.
- The Indian government regulates economic activities in defined areas for both private and public sectors.
Government's Role and Industrial Policy
- Government defines operational areas for public and private sectors through industrial policy resolutions.
- The Industrial Policy Resolution of 1948 specified private sector roles and laid groundwork for economic development.
- The 1956 resolution focused on public sector objectives to further industrialization and economic growth.
- The 1991 policy marked a shift towards disinvestment and encouraged private sector involvement, inviting foreign direct investment.
Forms of Public Sector Enterprises
- Public enterprises are categorized into:
- Departmental Undertakings
- Statutory Corporations
- Government Companies
- Public enterprises require public accountability, using public funds for operations and involving transparency to Parliament.
Characteristics of Public Sector Enterprises
- Established for active market participation and competitive engagement with private firms.
- If public enterprises incur continuous losses, they may be assessed by the Board for Industrial and Financial Reconstruction (BIFR).
Changing Role of Public Sector
- Initially aimed to build infrastructure, the public sector's role has evolved since Independence.
- Infrastructure development is crucial for industrialization, enhancing economic activity beyond a few regions.
- Policy adjustments decreased public sector reserved industries from 17 in 1956 to only three in 2001.
Economic Objectives
- Public sector aims to prevent wealth concentration, ensuring income distribution across the workforce.
- Functions include:
- Import substitution strategies to achieve self-reliance and reduce reliance on foreign imports.
- Promotion of regional balance and development in underprivileged areas to mitigate disparities.
- Harnessing economies of scale for large industries to maximize efficiency and minimize costs.
Oversight of Economic Power
- The public sector serves as a counterbalance to potential monopolistic practices in the private sector.
- Government aims to mobilize capital and oversee regional industrial development to ensure equitable growth.
These notes encapsulate the fundamental roles and structural characteristics of public and private sectors, as well as the evolving economic policies within the Indian context.
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