Thursday, March 18, 2010

Should Governments do business?


In India, when it got independence from the British, the Government was in the need of building Industries and Business to promote industrialization in the Country. At that time it didn’t have many Entrepreneurs and Industrialists. So Government took the initiatives and started many companies and Industries in all sectors. At that time, the Government is following a socialistic type of Government. So at that instead of encouraging new Entrepreneurs, Government itself has started all the Industries.

Those industries which were started by Government started running successfully and it contributed to the Industrial revolution of the Country. But as the Country progressed towards 1980 and 1990, there was a steady decline in their performance. The Public Sector Undertakings had started to behave like Government departments and that was why their performances declined during this period. But at the time, lot of private companies have been started and lot of new Entrepreneurs have grown in private sector of this Country.

This led to fair growth in the Industrial development of India. But the performances of many Government companies continued to decline. Some companies had gone sick at that time. And they became a burden for Government. After 1990 , the Government started disinvesting these Companies to private sector and they once again started performing well.

In USA, except finance and defense, every other industry is privatized. Because of this from 2008 many banks are failing in USA. But in India, non of the Banks failed.

I believe a Economy which is partially Market, and Partially socialistic, is good for any developing Country.


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