Question

Which of the following statements is/are correct regarding public sector organisations?
i. Public sector organisations are always fully owned by the government.
ii. They provide employment benefits such as job security, housing, and retirement benefits.
iii. Their primary aim is to serve the general public rather than generate profits.
iv. They operate in areas such as information technology and pharmaceuticals.

• A. Only i, ii, and iii
• B. Only ii, iii, and iv
• C. Only ii and iii
• D. All the above (i, ii, iii, and iv)

Answer 1

Answer:

C. Only ii and iii

Understanding Public Sector Organizations

• The public sector encompasses organizations that are owned, controlled, or funded by the government. Their primary goal is often to provide public services and achieve social objectives rather than maximizing profits.
• In India, the public sector plays a significant role in various economic activities and social development.

Analyzing the Statements:

• Statement i: Public sector organisations are always fully owned by the government.
  • This statement is incorrect. While many public sector organizations, especially departmental undertakings, are 100% government-owned, a large number of Public Sector Undertakings (PSUs) operate as corporations where the government holds a majority stake (typically 51% or more), but not necessarily 100%.
  • For example, many listed PSUs like State Bank of India or NTPC have government holding above 51% but also significant private shareholding. This concept is crucial for understanding disinvestment policies.
• Statement ii: They provide employment benefits such as job security, housing, and retirement benefits.
  • This statement is correct. A defining characteristic of public sector employment, especially in countries like India, is the provision of comprehensive benefits.
  • Public sector jobs are well-known for offering high job security, defined pay scales (e.g., through Pay Commissions), allowances like House Rent Allowance (HRA), medical facilities, and robust retirement benefits such as pensions, gratuity, and provident funds.
  • These benefits are often more predictable and comprehensive compared to many private sector roles, making them attractive for long-term career stability.
• Statement iii: Their primary aim is to serve the general public rather than generate profits.
  • This statement is correct. The fundamental objective of the public sector is public welfare and the provision of essential goods and services, even in areas where private enterprises might not find it profitable (e.g., rural infrastructure, basic healthcare, education).
  • While public sector organizations are expected to be efficient and sustainable, profit generation is a secondary objective, often aimed at self-sustenance and reinvestment, rather than the primary driver of their existence.
  • This distinguishes them sharply from private sector entities whose core aim is profit maximization for shareholders.
• Statement iv: They operate in areas such as information technology and pharmaceuticals.
  • This statement is generally factually true that public sector organizations *do* operate in these areas (e.g., HLL Lifecare in pharmaceuticals, National Informatics Centre (NIC) for IT services, Bharat Electronics Limited (BEL) with IT divisions).
  • However, in the context of competitive exams where the most 'correct' or 'defining' characteristics are sought, and given that the correct answer is stated as 'Only ii and iii', this statement is likely considered incorrect or less characteristic compared to other sectors.
  • The traditional and primary strongholds of the public sector are often considered to be heavy industries, banking, infrastructure (power, railways, roads), defense, and basic utilities, where their presence is historically dominant and often driven by strategic national interests or large capital requirements.
  • While they have a presence in IT and pharma, these sectors are largely driven and dominated by the private sector, and the public sector's role might be more niche (e.g., providing IT for government, producing essential drugs). Therefore, as a broad defining characteristic, it may be considered less accurate than the social welfare and employment benefits aspects.