Public Private and Global Enterprises Test - 25

Public sector enterprises typically invest and operate in certain core sectors deemed critical for national development and welfare. Civil aviation, power generation plants, and project management consultancies are examples of such core sectors where public sector enterprises often play a significant role due to their strategic importance. However, pharmaceuticals are not traditionally considered a core sector in the context of public sector enterprises. While the pharmaceutical industry is important for healthcare and economic development, it is usually driven by private sector investments and operations. 

Perpetual succession is the continuation of a corporation's or other organization's existence despite the death, bankruptcy, insanity, change in membership or an exit from the business of any owner or member, or any transfer of stock, etc. It implies that a company will continue to exist until and unless it is forced by the law to wind up. This implies that a company, as a separate legal entity, cannot come to an end by itself and will continue to operate forever.

PPP stands for Public-Private Partnership, where both the public sector (government) and the private sector collaborate to deliver public infrastructure or services. Delhi Metro Railway Corporation is a notable example of a PPP as it involves collaboration between the government (through Delhi Metro Rail Corporation) and private entities for the construction and operation of the Delhi Metro system.

Partnership is not a public sector undertaking. It refers to a form of business organization where two or more individuals or entities come together to jointly operate a business for profit. Partnerships can be formed in the private sector, where ownership and control are vested in the partners, and they are not typically owned or controlled by the government. 

The primary objective of most private sector enterprises is to maximize profits. Private sector businesses are typically owned and operated by private individuals, investors, or entities with the aim of generating returns on investment and increasing shareholder wealth. While private enterprises may also contribute to social welfare and serve public interests indirectly through job creation, innovation, and economic growth, profit maximization is their primary motive. 

A merit of statutory corporations compared to departmental undertakings is the ability to access capital markets. Statutory corporations, as public enterprises established by specific acts of parliament or state legislatures, often have more autonomy and flexibility in their operations compared to departmental undertakings. This autonomy allows statutory corporations to access capital markets, such as issuing bonds or raising funds through public offerings, to finance their projects or operations. In contrast, departmental undertakings typically rely on budgetary allocations from the government for funding and may have limited access to external sources of capital. 

Government companies, being established under the Companies Act, have the ability to generate revenue for the government through various means such as selling goods or services, participating in commercial activities, or earning profits from investments. Unlike departmental undertakings, which are directly owned and operated by government departments and may not focus on profit generation, government companies operate with the objective of generating revenue and maximizing profits, thus making them the most suitable option for revenue generation for the government. 

Disinvestment of Public Sector Enterprises (PSEs) refers to the process where the government reduces its ownership stake in these enterprises by selling a portion of its equity shares to private investors or the public. This sale of equity shares allows private investors or the public to acquire ownership stakes in the PSEs. It involves the government selling its existing equity shares in PSEs to external investors.

Steel Authority of India Limited (SAIL) is a government company. Government companies are public enterprises where the majority of the shares are owned by the government. These companies are created by a specific Act of the Parliament or State Legislature and operate under the Company's Act. SAIL, being a government company, is involved in the production and marketing of steel products and is under the direct control of the Indian government.

Public sector refers to government-owned organizations and government provided services. Private sector refers to organizations that are not government owned and the goods and services provided by organizations outside of the government. For example, companies owned by individuals are part of the private sector.

The primary motive of Public corporations is to provide services to the people and not to make profits. These organizations are expected to provide goods and services at a cheaper rate.