Role of Public & Private sector - Sector-wise Trends and Issues, Indian Economy Video Lecture | Indian Economy - B Com

If you had something really important to mail,
would you head to the Post Office,
which is run by the government and considered part
of the public sector, or would you go to a
place like UPS or FedEx, which are private
businesses. Politicians in the media often
talk about the private and public sectors
of our economy but what’s the difference?
And which one is more effective?
The private sector is made up of businesses
or corporations owned by people. The private
sector includes malls, grocery stores,
and your local diner. To make a profit in the
private sector, businesses must earn our money
by offering us products and services that
we want or need. When businesses have to compete
for the same dollars, prices go down because
no one wants to pay twice as much for shoes
at one store if you can get the same pair
cheaper at another place.
On the other hand, the public sector is not
supported by profits, so It doesn’t have to
compete for our dollars. Instead, the public
sector uses our tax dollars to fund its services.
So we pay for these programs no matter how
much or how little we use them.
The government decides how our tax dollars should be spent in the public sector.
This makes sense for some things. For example,
you probably wouldn’t want firefighters
or police officers competing with one another
for your business. In other cases though,
this means things cost more or service is
worse. The U.S. Post Office has $100 billion
in debt and is regularly bailed out with taxpayer
money. And the Department of Motor Vehicles
isn’t usually known for fast, friendly service.
In contrast, private companies know that if
they offer poor customer service and don’t
make money, they’ll go out of business.
When comparing the private sector with the
public sector, it’s clear that the market-driven
private sector is more efficient. When you
don’t have to be profitable or accountable,
things tend to be more expensive and the service
is worse.
So when there’s a choice between a private
sector or a government service,
think about that package you really need delivered.