The public organizations include state-owned enterprises, government agencies, local government authorities, municipalities and other public service institutions. Some of the government organizations can be non-profit organizations, on the other hand others participate in commercial activities also.

Private Sector

The Private Sector enterprises are controlled, owned and managed either by business entities or by  individuals. The private sector enterprises may be small-scale, medium scale or large-scale organizations. These organizations are formed to earn profit from their business operations and can raise funding from groups, individuals and other general public. Different private sector entities include partnership, sole proprietorship, multinational companies and cooperative societies. 

Difference between private sector and public sector

Public Sector Industries and Private Sector Industries

• India incorporated elements from socialist and capitalist models while describing India’s economy as a “mixed economy”
• A large portion of industry, trade, and agriculture was left in private hands. The State made critical agriculture interventions, regulated commerce, provided industrial infrastructure, and controlled key heavy industries

Criticism of government intervention

• Private capital could not take advantage of the expanded public sector industries and infrastructure, including installing licenses or permits for investment
• The policy restricting imports of goods produced in the domestic market has left the private industry without incentives to improve and make their products cheaper
• The State-controlled more items than needed, which resulted in corruption and inefficiency
• The State did not invest a significant amount in public education or health care
• Only areas in which the private sector was not ready to intervene where the State able to intervene. It was done to allow the private sector profit
• Also, the state intervention failed to help the poor and instead created a new middle class with unaccountable high salaries
• The poverty rate did not drop significantly during this time; even though the number of the poor fell, their numbers remained steady

The first initiatives for planned developments for the public and private sectors were unsuccessful in realizing the objectives of economic development and the well-being of all citizens. This was to become a political problem. Political power was quickly gained by those who had benefited from unequal growth, making it harder to move in that desired direction.

When evaluating the outcome of this initial phase of planned developments, it is essential to remember that this was the period where the foundations for India’s future economic growth were laid.

Foundations for India’s future economic growth with division in the public and private sector

• Mega-dam construction: Bhakra Nangal, Hirakud for irrigation or power generation were constructed 
• Establishment and operation of heavy industries 
• Transport and communication Infrastructure: Significant improvements were made to the infrastructure for transporting and communicating
• Many of the later economic gains, including those by the private sectors, could not have been achieved without these foundations
• It was the period in which land reforms were attempted in the agrarian field

Conclusion

In this article, we have learned the differences between public versus private sector organizations. The public sector businesses are controlled and owned by the government of a Country. The control and ownership of the state or central governments in these organizations are either partial or complete. The Private Sector enterprises are controlled, owned and managed either by business entities or by  individuals. The private sector enterprises may be small-scale, medium scale or large-scale organizations. Private capital could not take advantage of the expanded public sector industries and infrastructure, including installing licenses or permits for investment. The policy restricting imports of goods produced in the domestic market has left the private industry without incentives to improve and make their products cheaper. The State-controlled more items than needed, which resulted in corruption and inefficiency.