Subject name: Macro Economics.
Assignment topic: “Private sector vs. Public sector”
Submitted by: Zareen Rana 12-BS-S-82
Submitted to: Miss. Aysha Sarfraz
Private sector vs. public sector * Private sector:
The part of the economy that is not state controlled, and is run by individuals and companies for profit. In most free-market economies, the private sector is the sector where most jobs are held. This differs from countries where the government exerts considerable power over the economy.
* Public sector:
The part of national economy providing basic goods or services that are provided by the private sector. It consists of national and local governments, their agencies, and their chartered bodies. The public sector is one of the largest sectors of any economy; in the US, for example, it accounts for about 20 percent of the entire economy.
* Features of private sector:
These undertakings are owned, controlled and financed by private businessmen. There is no government participation in them. The main motive of private sector undertakings is to earn profits. Their main characteristics are given below: * Private Ownership and Control:
A private sector undertaking is fully owned and controlled by the private entrepreneurs. It may be owned by one individual or by a group of individuals jointly. When owned by one person, it is called Sole Proprietorship. A group of persons may jointly own the firm in the form of joint Hindu family business, partnership, Joint Stock Company or cooperative society. * Profit Motive:
The main objective of private sector undertakings is earning profits. Profits provide the reward for the risk assumed and the required return on capital.
* No State Participation:
There is no participation by the Central or State Governments in the ownership and control of a private sector undertaking. *