explain the importance of private sectors and public sector in contributing economic rate and GDP rate of our country india.

Asked by Pushkal Shukla | 7th Sep, 2014, 01:52: PM

Expert Answer:

India is the world’s tenth largest economy and the fastest growing sectors of Indian economy are services. Trade hotels, finance, real estate, transport and communication accounts 60 percent and above of GDP. Agricultural, forestry, and fishing account 12 percent of GDP which provides more than 50 percent of the labour force. Manufacturing sector accounts for 15 percent of GDP, construction, mining, electricity constitutes the remaining 13 percent of GDP.

 

In the public sector, the government owns most of the assets and provides services to the public. They raise money through taxes and other ways to meet their expenses. Earning profit is not their motive. Some of the activities which involve large investment can be undertaken only by the government such as construction of roads, bridges, railways, generating electricity, ration shops, health and education. In these activities, the government has to support and ensure for everyone. Public plays important role in the economic development and self reliance of a country. It provides balanced regional growth, filling the gaps in capital goods, employment, export promotion and foreign exchange earnings.

 

In the private sector, the ownership of assets and delivery of services are within the private individuals or companies. Earning profit is their main motive. They do provide services which are paid ones. Private sector has grown tremendously over the last 15 years and the opening up of Indian economy has increases the flow of foreign direct investment. Very clear to notice the growth of Indian BPOs, Indian software companies, Indian private banks, financial service companies etc.

 

In the last few years, the growth and investment in the private sector has exceeded the growth of the public sector. The share of the private has sector has increased from 48.83 percent in 2001-01 to 68.55 percent in 2009-10 in the net sales of manufacturing and services industry where as the share of public sector has decreased to 31.45 percent from 51.17 percent. Private sector contribution in the net profit in the non-agricultural economy increased to 63.86 percent from 39.17 percent whereas the public sector declined to 36.14 percent from 60.83 percent of growth.

 

Answered by Tharageswari S | 8th Sep, 2014, 08:52: AM

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