PUBLIC & PRIVATE

SECTOR
ENTERPRISE

PUBLIC SECTOR
Organisation run directly by the National or Local Govt.
Membership is open to the general public.
Such companies can advertise, to offer its shares to general public.

ADVANTAGES
DISADVANTAGES
Profit Margins Kept Low
Cannot be used inappropriately
Can use its power/size to
dominate a Market
Encourage Industrial Growth of
under-developed regions.
Employees have generous
benefits apart from the salary

Slow in decision making

Not competitive enough

Lot of Legal Formalities

Incompetency usually faces management issues

Some organisations are expensive to run implying a lot of money being used from
tax-payers

Public Sector Organizations - INDIA

Ministry ( Railway, Finance etc.)
Departmental Undertaking ( Defence, Post & Telegraph,
Defence production unit)
Statutory Corporation ( LIC, AIR India, IFC, RBI, ONGC,
NTC etc..)
Central Board ( Dams, Excise and Customs, Trustees)
Government Companies ( BHEL, ITI, HMT, Hindustan
shipyard etc.)

PRIVATE SECTOR
Owned and run by Private individuals / groups.
Includes corporations (both profit and non-profit), partnerships, and
charities.
Involves Multi-national Business.

ADVANTAGES
Stable form of structure
Magnitude of profit incurred is
high
No interference in internal affairs
by Politicians/Govt.
Decision making very prompt
More capital can be raised
Employees have greater scope of
learning

DISADVANTAGES

Profits to be shared among large amount of people

Greater Administrative costs

Chances of consumer exploitation

Survival of the fittest

Detailed legal procedures to be followed to set up business

Employees face Work Tension

Private Sector Organisations

IT Firms ( Infosys, Wipro, IBM etc. )
Telecommunication ( Vodafone, Idea, Airtel etc. )
Private Banks ( HSBC, HDFC, ICICI etc. )
Private Airlines ( IndiGo, Jet Airways, SpiceJet etc. )
Automobile ( BMW, FORD, AUDI etc.)

COMPARISON
PUBLIC SECTOR

PRIVATE SECTOR

Meaning

The section of a nation's economy,

which is under the control of
government, whether it is central,
state or local, is known as the
Public Sector.

The section of a nation's economy,

which owned and controlled by
private individuals or companies is
known as Private Sector.

Basic objective

To serve the citizens of the

country.

Earning Profit

Raises money from

Public Revenue like tax, duty,

penalty etc.

Issuing shares and debentures or

by taking loan

Areas

Police, Army, Mining, Health,

Manufacturing, Electricity,
Education, Transport,
Telecommunication, Agriculture,
Banking, Insurance, etc.

Finance, Information Technology,

Mining, Transport, Education,
Telecommunication,
Manufacturing, Banking,
Construction, Pharmaceuticals etc.

Benefits of working

Job security, Retirement benefits,

Allowances, Perquisites etc.

Good salary package, Competitive

environment, Incentives etc.

Basis of Promotion

Seniority

Merit

Job Stability

Yes

No