Though public sector is very essential for industries, many public sector undertakings incur huge losses and are a drain on the economy's resources. Discuss the usefulness of public sector undertakings in the light of this fact.
While it is true that many public sector undertakings incur huge losses and act as a drain on the economy's limited resources, their usefulness extends beyond financial profitability. It is often difficult to close a government undertaking even if it drains resources, but this persistence serves a larger social purpose.
The public sector is not meant for earning profits; rather, its main aim is to promote the welfare of the nation. Therefore, these enterprises should be evaluated based on their contribution to people's welfare rather than just their financial performance.
Furthermore, public sector undertakings play a vital role in protecting employment. Several public sector firms were originally private firms that were on the verge of closure due to losses. They were nationalised specifically to protect the jobs of the workers, preventing unemployment.
Additionally, at the time of independence, Indian industrialists did not have the capital to undertake industrial development. The public sector was required in a big way to establish industries essential for the growth of the Indian economy. Thus, despite the financial losses, their role in nation-building remains significant.
Explanation
The answer is derived directly from the provided context which argues that public sector enterprises should be judged on welfare contribution rather than profits. It highlights that the public sector was essential at independence because private industrialists lacked capital. It also notes that many units were nationalised to save jobs when private firms failed, serving a social purpose despite losses.