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Role of the Public Sector in the Indian Economy | Social Issue Essay, Article, Paragraph for Class 12, Graduation and Competitive Examination.

Role of the Public Sector in the Indian Economy

Scheme of the Essay

Exposition: After independence, India adopted a mixed economy. Rising Action: This type of economy was adopted because private entrepreneurs were not forthcoming.


(1) The public sector has developed core industries.

(2) It has helped in the dispersal of industries.

(3) Foreign collaboration and help were possible through the public sector only.

(4) The public sector can help in checking inflation.

Falling Action: The public sector has made a huge profit.

Ending: Without the public sector economy would not have been stabilised.

After independence, India adopted a mixed economy in which the public and private sectors were given equal importance. It was necessary in order to derive maximum benefit out of the two systems. In the public sector, there is the possibility of producing quality goods whereas in the private sector, there is initiative and drive. For India, such an economy was necessary because the private entrepreneur was not in a position to make huge investments.

Indian economy has twin bases agriculture and industry. The core industries were not paid any attention in India, during the British rule. So we had to import heavy machinery from the foreign countries. This was a drain upon our foreign exchange. To cover up this gap it was necessary to set up core Industries in India. The industries could be financed only by the government because the government could get a lot of loans from the foreign countries. Without the public sector, it would have become impossible for India to meet the demand for heavy industries in the country.

In a big country like India, it is necessary to have a dispersal of industries, otherwise there cannot be any harmonious development of the whole of the nation. The private entrepreneur was not prepared to set up industries whereas as places it was difficult to get the raw material or labour. They would always see to their profit and would like to maximize profit by setting up industries where raw materials and labour were quite cheap. Public sector industries have been set up even in the remote comers of India. As a result of it there can be many benefits to the people of that are and they will be getting good employment opportunities. The public sector was necessary to get the help of technological know-how from the foreign countries. It was not possible to get foreign collaboration till the government herself was involved. That is why in the public sector a number of industries have been set up with foreign collaboration. This has helped India to increase production of certain commodities which were not available in India. India’s economy has been stabilised. Inflation has become one of the serious maladies of our economy. Though it is not so easy to put a check on this price-spiral yet public sector has played an important role in cutting down the price of certain commodities. Public sector industries market the goods not by keeping only the profit motive in mind. They take even the larger interests of the nation into consideration. So by pricing their commodities reasonably they have forced the industries in the private sector to keep the prices down. Moreover, the production of quality goods has also increased the export of these commodities. It is on the basis of this that the public sector industries are still working at a loss but it is inevitable for industries which produce goods not to be consumed by the bulk of the consumers. It is wrong to think that in the public sector industries, no one takes initiative. In fact, it totally depends upon the person who manages those industries. We can say that without the public sector it would have been impossible to make our economy stable and healthy.


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