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PRIVATE SECTOR V/S PUBLIC SECTOR: INDIAN

CONTEXT
BY: DR. T.K. JAIN
AFTERSCHO? OL

India has adopted mixed economic system – it

means we are having both private sector and
public sector. These sectors have their
respective domains. When it is the question of
service to common masses, rural development,
infrastructure development, backward area
development, or policy implementation – the
public sector takes the lead. But when we talk
about profitability, return on investment,
autonomy, growth, technology absorption,
innovation, low cost solution etc. the private
sector takes the lead.
Both these sectors have different roles to play.
They are doing a great job in their respective
domains. The public sector must operate in sectors related to common masses – or related
to public policy. Private sector must operate in sectors related to consumer markets,
luxury goods, entertainment etc.
Both these sectors are important and neither can replace the other. We have to expect
greater cooperation between these two sectors for the development of our economy.
Public sector is definitely not a very profitable and efficient sector – they have to
benchmark against private sector in terms of profitability, efficiency, and capacity
utilization. Private sector has also to play an important role in the years to come.
They must develop their knowledge, skills and expertise and try to transform their
knowledge across industries and try to learn from others also.
We organized a GD (group discussion) and the findings of the GD are as under:

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P Let us start with discussion on motives of these organizations. Private sector is for
earning profit. In the public section, the primary motive is service to the public. Thus we
can say that it is improper to compare them. They are both right and work in their
respective domains. Although there are differences in their working – but they are having
different domains.
P2: in the public sector the increment in salary is not based on performance – but in
private sector you get performance linked package. There they value your performance.
You give better results, you get better package. In public sector, the package increases
after some time. Thus there is no growth in public sector – especially for a very hard
working person. Therefore, in public sector, you cannot get very high motivation. You
cannot work hard and get higher package
H: I agree, but if we talk about the present scenario – the private sector is cutting jobs.
There are airlines companies and others which are cutting jobs. There are no increments
and growth in private sector. As of today – public sector is consistent in its performance.
There are no job cuts in public sector.
P : we have to look at long term measures of performance assessment. If we look at
ROCE (return on capital employed), the performance of private sector is much better.
However, public sector is able to offer better services – as they are willing to go even to
remote areas – they are for the benefit of common people.
P2: in public sector there are only limited sectors – in private sector you have far more
varieties – in the government sector – job security in private sector is increasing –
recession is a short term phenomenon – it will not remain for a long time.
R: in public sector, they don’t give you attractive package – plus there is very high
corruption – if you can manage your time well – private sector is better
P2: corruption is there in private sector also. We should look at aspects like job security
also – in private sector – they will keep you only till you give performance – there are a
few companies which are giving job security – most of the private sector companies do
not provide facilities, compensation, and social security – they are also not able to follow
ethics properly.
H: in government sector, there are many facilities like pension plans, etc. we have much
better facilities
P: in private sector now they give you PF and pension (optional plan). There are
problems in private sector – but in spite of all these – you get better package as senior
executive. You get more freedom. There is challenge for you. In private sector, they
create a truly challenging work assignment for you. You will be given a challenging work
environment. Thus private sector offers a very stimulating work environment. You can
take the examples of excellent projects, which have been done by private sector in less
cost and less time.

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 Contact Dr. T.K. Jain (91-9414430763) regarding starting AFTERSCHO?ÆOL centers in
your college / institution / organization. Promote social entrepreneurship, join PGPSE
and become a social entrepreneur. Email us: afterschoool@in.com

H: private sector employee is more affected by the environment than a public sector
environment. In private sector, you have to work hard – thus we find more creative
people today in private sector.

P2: employees are always under pressure to give the best performance in private sector.
P: this is not a drawback of private sector. Private sector creates some goals for you. In
Government sector no body looks at your performance so seriously. In private sector they
look at quantitative and qualitative performance appraisal. We can take examples of
many government organizations like RSRTC – which are not able to perform very well.
Railways is one exception now.
H: in private sector – the rules are changed as per changing times – they offer better
packages – they modify their leadership style, they also improve their working
environment with the changes in time.
P2; private sector is suitable to a person – who is target oriented. There are some
facilities, which are provided by only private sector – like autonomy
P: we cannot say which sector is good or better – they have different roles – they are
relevant in their respective domains. It depends on us as per our convenience.
H: if we look at government sector – we have a long process of employee selection.
Private sector selects on references – there are better packages, easier selections
P: in government sector - there are political issues – there are issues like pressure groups,
reservation, and public pressure. Thus the appointments are based on many factors
P2: there are employees who are selected for some jobs – but they don’t do it well.
P: the government can provide jobs to poor people in backward areas.
R: the question should not be which is better – but the real issue is that if both these
sectors improve, our economy will improve – people will get better opportunities.
H: in the public sector, we are bound in a fixed job – there is no autonomy- in private
sector –we have far more freedom and autonomy.
P: it depends on the field that we have taken up – in private
sector, we can change our career faster. In India, the facilities
offered by Army (defense sector) are the best in the public
sector – still every officer is busy doing MBA and willing to
switch over from Army to private sector.
H: Private sector cannot do without the help from government
sector. There is a great role for public sector. Now private universities are coming up.
They are offering better possibilities.

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 Contact Dr. T.K. Jain (91-9414430763) regarding starting AFTERSCHO?ÆOL centers in
your college / institution / organization. Promote social entrepreneurship, join PGPSE
and become a social entrepreneur. Email us: afterschoool@in.com

P: job security and future security is there in public sector. We should have a provision
for performance linked packages. If we are able to create performance linked packages,
we would be able to have better public sector. People will work with passion – just like in
private sector. In private sector – we know that we get package only on the basis of our
performance.
H: we should change our policies in the public sector, so that we are able to make it more
competitive. If we are able to introduce such changes – we will be able to attract people
to the public sector.
P: level of corruption is more in the case of public sector – it is all due to hierarchy, rules,
regulations, and bureaucracy. Corruption is increasing continuously. In private sector,
there is monitoring system – therefore there are less chances of corruption in private
sector
H: it is our mindset = when we say that public sector is better or private sector.
P: we have these as options –we can to either – it is difficult to say that one sector is
better than others. The chances of corruption are there due to lower packages being
offered for some officers. The people are forced to go for corruption – as they are not
able to survive a good living standard in the rising dearness.

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