Yes, the public sector companies can compete with the private sector, but with certain differences in their objectives and functioning.

The public sector has played a vital role in the development of the economy. Both the public sector and private sector need to be viewed as mutually complementary parts of the national sector rather than merely as competitors. Each sector has its own strengths and areas of operation.

However, in terms of profits and efficiency, the public sector faces certain challenges. Public enterprises are accountable to the public through the Parliament. This accountability towards the public and government can affect their speed of decision-making and operational efficiency compared to private sector units.

The public sector has distinct advantages in areas requiring economies of scale. Where large scale industries are required with huge capital outlay, the public sector has stepped in effectively. Examples include electric power plants, natural gas, petroleum, and telephone industries. These units required a larger base to function economically which was only possible with government resources.

In today's liberalised, competitive world, the public sector needs to focus on achieving more. The government has introduced disinvestment involving sale of equity shares to raise resources and encourage wider participation. This indicates that the public sector is being reformed to enhance its efficiency.

Additionally, the public sector serves the important function of acting as a check over concentration of economic power and preventing monopolistic practices, which contributes to social welfare rather than just profits.