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Questions:

Generic 5

5 x 5 = 25

What are the differences between Public and Private Sector?

What are the disadvantages of Government company?

Explain the advantages of Government Company.

Mr.Sudhan is studying in B.Corn, 1st year. His father, Mr.Somu is a leading businessman in Chennai. Somehow, Mr.Sudhan does not know anything about utilities. But he is to prepare a lesson for his class in this topic. He request his father for help. His father tells Mr.Sudhan that Public utilities are no different from his own business except that these are controlled by Goveminent instead of private people. Meanwhile, Mr.Chandrasekaran a friend of Mr.Somu comes there. Mr.Chandrasekaran is an employee of Chennai Electricity Supply Undertaking. Mr.Chandrasekaran intervenes in the conversation going on between Mr.Somu and his son and hold that Mr.Sudhan is not correct; there are other special features of public utilities, too. Perform the characters of Mr.Sudhan, Mr.Somu and Mr.Chandrasekaran and state your positions.

You are a newly appointed MD of a foreign sector tourist Bus transport company. The management of the bus Transport undertaking of your city finds that its buses are not able to attract very many tourists. Private Mini-Buses are seen to be preferred by people on certain routes. As a result, the undertaking is incurring losses. Therefore, management wants to reformulate its price policy. As a CEO or MD, what advice can you give to it? Explain.

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Answers Key:

Generic 5

5 x 5 = 25

S.No	Public sector	Private sector
(i)	Service motive-with twin goal-achieve economic development with democratic values and economic equality.	Profit motive-maximise the profits.
(ii)	Sufficient, unlimited resources. Successful in mobilising savings through banks, bonds, etc.	Limited resources. The private sector is not successful in mobilising the resources of the country or from foreign. countries for the economic development.
(iii)	Checks concentration of economic power in the hands of few.	Leads to concentration of economic power in the hands of few individuals.
(iv)	Develop those sectors which are neglected by the private sector.	Develop those industries/ sector in which risk is less and returns is more.
(v)	Preserves national wealth.	Exploitation of natural resources like forests, mines, etc., for personal advantage.
(vi)	Brings in balanced growth; starts industries in backward areas.	Do not establish industries in backward areas.
(vii)	Heavy, basic and defence industries are reserved for public sector.	Consumer goods industries, agriculture are in private sector.
(viii)	Consumer welfare is considered important. They are supplied goods and services at cheaper prices.	Consumers are exploited.
(ix)	Model employer. Solves unemployment problem to a great extent.	Exploitation of employees. Welfare of employees neglected.
(x)	The management of public sector industries are managed by civil servants. They lack efficiency/skill to run public enterprises on commercial lines.	Technical qualification and experience of private owners is used for efficient management of private sector enterprises.

The disadvantages of Government company:
(i) Board of directors packed with 'Yes-Men':
On the Board of Directors of a government company, there are Government appointed directors (Government being the major shareholder); who are 'yes-men' of the Government. They are unable to run the company, in a business like manner.
(ii) Autonomy only in name:
Independent character of a Government company exists only in name. In reality, politicians, ministers, Government officials, interfere excessively in the day-to-day working of the government company.
(iii) A Fraud on companies act and constitutions:
A Government company is criticised as being a 'fraud on the companies act and on the constitution. This criticism is valid on the ground that the Government can exempt a Government company, from application of several provisions of the companies act. Again, the Parliament is not taken into' confidence, while creating a Government company.
(iv) Fear of exposure:
The annual report of the government company is placed before the Parliament/ State Legislature. The working of the company is exposed to press criticism: Therefore, management of the Government company often gets demoralized and may not take initiative to come out with and implement something innovative.
(v) Lack of expertise in deputationists:
The key personnel of a Government company are often deputed from Government departments. These deputationists generally lack expertise and commitment; leading to lower operational efficiency of the government company.
(vi) Selfish functioning:
The Government company works neither for the government nor for the public at large. It serves the personal interests of people who work in the company and who dictate policies of the company

The advantages of Government Company are:
Easy formation:
A Government company can be easily formed under the Companies Act, just by an executive decision of the government.
Internal autonomy:
A government company can manage its affairs independently. It is relatively free from ministerial control and political interference, in its day-to-day functioning.
Private participation:
Through Government company device, the government can avail of the management skills, technical know how and expertise of the private sector and foreign countries. For example, the Hindustan Steel Limited has obtained technical and financial assistance from the U.S.S.R., West Germany and the U.K.for its steel plants at Bhilai, Rourkela and Durgapur.
Easy to alter:
Objectives and powers of the Government company can be changed by simply altering the Memorandum of Association of the company, without seeking the approval of the Parliament.
Discipline:
The Government company is subject to provisions of the Companies Act; which keeps the management of the company active, alert and disciplined.
Professional management:
A Government company can employ professionally qualified managers; because it has its own personnel policies.
Public accountability:
The Annual Report of a Government company is presented to the Parliament/State Legislature. These reports can be discussed and debated there.

Characters of Mr.Somu:
He is a leading businessman in Chennai. He teaches about his business to his son. He explains the differences private and public government business.
1. Government business need not control because Government will do the business.
2. Private business people will be controlled by Government in the way to paying tax to the Government.
3. Public utilities can be served by Mr. Somu because the utilities services have been done by him.
Characters of Mr.Chandrasekaran:
He is an employee of Chennai Electricity Supply Undertaking. It is a board organisation. It is Government organisation. He explains about the Public Utilities. Electricity supply is very important one to public. The service is given by Government. Electricity supply gives benefits to people, industries, factory, business offices, agriculturalists and household.
Characters of Mr.Sudhan:
He is studying in B.Com., 1st year. He is good to give a speech in his college about public utilities. He gathered sufficient information about public utilities from his father and his father's friend. He is a student and he is studying commerce. He learns business, trade and industries in text book. Practically he got information from his father's friend Mr.Chandrasekaran.

1. For attract the people, they can change the buses with new facilities.
2. Wi-fi facilities can be provided.
3. New painted buses with luxury can run.
4. Air condition facilities can apply.
5. At low cost they can run the bus.
6. New engine can introduce for control of air problems.
7. The government has the power of control the buses. So they can provide subsidy facilities to the people to attract.
8. Buses can be remodelling with new ideas among the people.
9. Can adopt new innovations to attract the people.
10. Tickets cost may be reduced.