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Questions
Mention one problem faced by public sector units in India.
State any two/three drawbacks of state enterprises.
Explain any four problems faced by PSUs in recent times.
Discuss any four problems faced by public sector enterprises.
Answer in Brief
Solution
The main problems faced by public sector enterprises are as follows:
- Lack of Incentive: The government servants do not have the same incentive to do their best as a man in private enterprise has. In the government service, promotion is awarded simply by seniority and not by merit. They are least concerned with the profit of the enterprises. Indiscipline and lack of responsibility among the workers, frequent labour unrest and bad relationships between the management and the workers also paralyse many public sector enterprises.
- Wasteful Expenditure: There is a great deal of waste in the expenditure. The government funds and property are used carelessly by the government officials and other servants. It increases the costs of production in these enterprises.
- Corruption: Corruption, bribery and dishonesty are very common things in public enterprises.
- Delay in Completion: Many public sector units take a long time to be completed. The greater the period of completion, the lesser will be the rate of return. Decisions are not taken and implemented in time. Thus, it puts an extra burden on the scarce resources of the country.
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Notes
Students should refer to the answer according to their questions.
Problems of Public Sector Enterprises/Reasons for Declining Popularity of Public Sector
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