Advantages of State Enterprises
- Ensuring better public service: Some public utilities are very significant for public interest. Commercial running of those through private Sector will harem provision of better public service. Operation of those in the public sector ensures better service for the public. Radio, Television. Rahway, postal Service, etc. Provide Service, etc. Provide better Service usually, when these are in hand of the hand of the government.
- Education and Health: The services of education and health sectors are very important for the public. Those in the public sector provide better Services.
- Protection of resources: National resources are better protected if in the hand of the government. If those resources are under governmental control. Those are not used for individual’s interest.
- Protection to defiance industry: Defense industry is better protested if it is in public sector. State security will be at stake if this industry is in the private hand.
- Protection and control of harmful goods: For better control, harmful goods or narcotics like wine ganja, afim heroine, etc. Should be produced at this the public sector. If to produce to some control.
- Control of currency and banking: If some of the banks are in the hand of the government including the central bank, then his control of banks and currency system, and the stability of the country are more ensured.
- Industrialization in the developed or poor countries: If industries are established by the government, then rapid industrialization of the country become possible, especially in the newly independent poor countries, or developing countries where private enterprises are not too much advanced to lead industrialization.
- Solution to unemployment problem: The unemployment problem can be better solved through public sector enterprise, as easy and fair wage employment can be provided through public sector enterprise.
- Government trade: For equity, justice, and uninterrupted supply export. Import and trade of some product should be in the hand of the government.
- Stabilizing product prices: Price fluctuation of some commodities can be removed through product should be in the public sector.
- Equitable distribution National: Big or heavy industries in the public sector ensure equitable distribution of National Income. Big or large scale industries in private sector accumulate resources in few hands.
- Preservation of privacy: Privacy of certain industry and technologies world is better preserved in the public sector than in the private sector.
- Cheep productions of goods: In spite of the problem. It is often possible to produce goods by emphasizing public interest and preventing wastage and corruption.
- Elimination of State exploitation and oppression: A private entrepreneur usually adopts exploitation and oppression through profiteering motive. State enterprises help elimination of economic exploitation and oppression.
Thus State enterprises are important in a number of Aspects for national inters.
Disadvantages of State Enterprises
State enterprises also suffer from a number of demerits. Often these show inefficiencies. That is why a number of scholars argue against state enterprises. Some of those problems faced by the state enterprises.
- Inefficiency of Management: State enterprises usually suffer from inefficiencies of management. As salaried personnel run these, and their accountability can hardly be ensured for different reasons; so state enterprises may suffer from inefficiency’s.
- Harmful Conflict in management: Sometimes politics & nepotism create conflicts within the management, which may harm the business-success of state enterprises.
- Emphasis of status qua: Normally. Management of state enterprises emphasizes the status qua the maintenance of prevailing status. In fear of criticism, new ideas and innovations are not implementing in the state enterprises.
- Poor Localization of Industries: In making decision of state enterprises of industries, considerations other economic factors, sometimes become dominant which may lead poor laicization and problem of decentralization may arise.
- Increase of loam: Public interest is involved with state enterprises. Even loosing state enterprises. Even loosing state enterprises are supported by local and foreign loan. Which increases?
- Increase of Burden of Taxation: State enterprises are usually run with a vision to provide services to the public. Sometimes, those fail even to produce Break even revenue operate even below the Breakeven point (BEF). Commercial policy or profit making is, sometimes, sacrificed for public interest. The loss or subsidy is met by excess burden of taxes borne by the public.
- Watering of Capital: Misuse of capital is more seen in the public sector enterprises Use of more capital than requirement is termed as Watering of capital is usually a severe problem in the state enterprises.
- Interference of the National Assembly: National Assembly in the affairs of the state enterprises.
- Negligence of the Workers: The workers in these enterprises show comparatively more negligence in their duties. Lack of proper motivation also chances negligence.
- Problem to take Quick Decision: Management of state enterprise fails to take quick decisions. The decision process requires the inclusion of a number opinion of authorities which deter quick decision making. But quick decision making is vital for success. These also suffer from red tapism keeping fail captive by red thread that deters.
- Other Problem: Public sector had failed to be proved as efficient globally in the 29th century. The socialist countries discarded socialism or public sector sector concept. There also suffer from corruption, low productivity, etc.