Public Private and Global Enterprises - Solutions

 CBSE Class 11 Business Studies

NCERT Solutions
Private, Public and Global Enterprises


1. Explain the concept of Public Sector and Private Sector.

Ans. Business enterprises owned and managed by individuals or group of individuals come under the private sector. For example: Co-operative societies, Sole proprietorship.

Enterprises that are managed and owned partly or wholly by the central or state government come under the public sector. Such enterprises are either a part of the concerned ministry or are created by a special act of the parliament. For example: Departmental undertakings, Government companies, statutory corporations.

2. State the various types of organizations in the private sector.

Ans. Various types of organizations in the private sector include:

1. Sole Proprietorship: Sole proprietorship refers to a form of business organization which is owned, managed and controlled by an individual who is the recipient of all profits and bearer of all risks.

2. Hindu Undivided Family Business: It refers to a form of organization wherein the business is owned and carried by the members of the Hindu Undivided Family (HUF).

3. Partnership: Partnership is the relation between persons who have agreed to share the profit of the business carried on by all or any one of them acting for all.

4. Cooperative Society: Cooperative society is a voluntary association of persons, who join together with the motive of welfare of the members.

5. Joint Stock Company: A company is an association of persons formed for carrying out business activities and has a legal status independent of its members.

6. Multinational Corporations: An MNC is a company whose business operations extend beyond the country in which it has been incorporated.

3. What are the different kinds of organizations that come under the public sector?

Ans. Following are the different kinds of organizations that come under the private sector.

1. Departmental Undertaking: This is the oldest and traditional form of public enterprises. It is managed by government officials as one of the government departments. It is under the control of concerned minister of the department, who is answerable to government through parliament.

2. Statutory Corporation: Statutory Corporation is a corporate body with a separate legal existence, set up under a special act of parliament or of the state legislature.

3. Government Company: According to the Indian Companies Act 1956, a government company means any company in which not less than 51 per cent of the paid-up capital is held by the government or by any state government or partly by central government and partly by one or more state governments.

4. List the names of some enterprises under the public sector and classify them.

Ans. Some of the enterprises under the public sector are as follows:

RailwaysDepartmental Undertaking
Reserve Bank of IndiaStatutory Corporation
Life Insurance Corporation of IndiaStatutory Corporation
The Hindustan Steel limitedGovernment Company
Coal India LimitedGovernment Company
Post and Telegraph DepartmentDepartmental Undertaking
Food Corporation of IndiaStatutory Corporation
State Financial CorporationStatutory Corporation
Damodar Valley CorporationStatutory Corporation
Hindustan Machine ToolsGovernment Company
State Trading Corporation of IndiaStatutory Corporation
Hindustan Aircrafts LimitedGovernment Company

5. Why is the government company form of organization preferred to other types in the public sector?

Ans Reasons why the government company form of organization is preferred to other types in the public sector are as follows:

 1. It has the separate legal entity, apart from the government.

2. It enjoys autonomy in all management decisions and takes actions according to business prudence.

3. A government company can be established by fulfilling the requirements of the Indian Companies Act. A separate act in the parliament is not required.

6. How does the government maintain a regional balance in the country?

Ans. The public enterprises are set up to provide industrial growth in those regions that have the least industrial activities. This helps to accelerate economic development, provide employment to the work force and develop a huge industrial base. In this manner, the government maintains a regional balance in the country.