In this article we will discuss about the relative role of public sector and private sector in economic development of India.

Relative Role of Public Sector in India:

Public sector occupied a worthy place for achieving systematic and planned development in a developing country like India. In a country like India suffering from multi-dimensional problems, private sector is not in a position to make necessary effort for the development of its various sectors simultaneously.

Thus, in order to provide the necessary support to the development strategy of the country, the public sector offers the necessary minimum push for bringing the economy to a path of self sustained growth.

Thus it is now well recognised that public sector plays a positive role in the industrial development of the country by laying down a sound foundation of industrial structure in the initial stage of its development.


Following are some of the important relative roles of the public sector in the economic development of a country like India:

(a) Promoting economic development at a rapid pace by filling gaps in the industrial structure;

(b) Promoting adequate infrastructural facilities for the growth of the economy;

(c) Undertaking economic activity in those strategically significant development areas, where private sector may distort the spirit of national objective;


(d) Checking monopolies and concentration of power in the hands of few;

(e) Promoting balanced regional development and diversifying natural resources and other infrastructural facilities in those less developed areas of the country;

(f) Reducing the disparities in the distribution of income and wealth by bridging the gap between the rich and the poor;

(g) Creating and enhancing sufficient employment opportunities in different sectors by making heavy investments;


(h) Attaining self-reliance in different technologies as per requirement;

(i) Eliminating dependence on foreign aid and foreign technology;

(f) Exercising social control and regulation through various public finance institutions;

(k) Controlling the sensitive sectors such as distribution system, allocating the scarce imported goods rationally etc.; and

(l) reducing the pressure of balance of payments by promoting export and reducing imports.

Relative Role of Private Sector in India:

India, being a mixed economy, has assigned a great importance on the private sector of the country for attaining rapid economic development. The Government has fixed a specific role to the private sector in the field of industries, trade and services sector.

The most dominant sector of India, i.e., agriculture and other allied activities like dairying, animal husbandry, poultry etc. is totally under the control of the private sector. Thus private sector is playing an important role in managing the entire agricultural sector and thereby providing the entire food supply to the millions.

Moreover, the major portion of the industrial sector engaged in the non-strategic and light areas, producing various consumer goods both durables and non-durables, electronics and electrical goods, automobiles, textiles, chemicals, food products, light engineering goods etc., is also under the control of the private sector.

Private sector is playing a positive role in the development and expansion of aforesaid group of industries. Besides, the development of small scale and cottage industries is also the responsibility of the private sector.


Finally, the private sector is also having its role in the development of tertiary sector of the country. The private sector is managing the entire services sector providing various types of services to the people in general. The entire wholesale and retail trade in the country is also being managed by the private sector in a most rational manner.

Moreover, the major portion of the transportation, especially in the road transport is also managed by the private sector. With the growing liberalisation of Indian economy in recent years, the private sector is being assigned with much greater responsibility in various spheres of economic activities.