Private, Public and Global Enterprises
Economy is classified into two sectors, private sector and public sector. Private sector is owned by individuals and public sector is owned by central , state government or both. Private sector aims at maximising profits and public sector aims at promoting public welfare.Private sector exist in form of sole proprietorship, partnership or joint stock company whereas public sector exist in form of departmental undertakings, statutory corporations or government companies. There are three forms of public sector enterprises – Departmental Undertaking, Public/ Statutory Corporation and Government Company. Departmental Undertaking is formed under the Ministry of Government, Statutory Corporation is formed by special Act of Parliament or State Legislature and Government Company is formed by registration under the Companies Act, with or without private participation. Statutory Corporation and Government Company have separate legal entity whereas Departmental Undertaking has no separate legal entity. Public sector enterprises have played a key role in the Indian economy since independence. In view of the problems faced by these enterprises government has introduced certain reforms as part of the New Industrial policy 1991. Some of these reforms are reduction in number of industries reserved for Public Sector, disinvestment in PSUs, losing or revival of sick units. Role of public sector in the Indian economy can be explained as development of infrastructure, development of backward regions, economies of scale, check over concentration of economic power and import substitution.
A joint venture may be formed either by Indian and a foreign party forming a company in India or a foreign party or an Indian party buying shares in an existing Indian company. Partnerships between the public sector and the private sector in financing, designing and developing infrastructural facilities may be termed as Public Private Partnership (PPP).