Features, Merits and Demerits of Government Company and Changing Role of Public Sector Video Lecture | Economics for JAMB

Ans. A government company is a company in which at least 51% of the paid-up share capital is held by the government. Its features include government control, public ownership, and the ability to operate in sectors of national importance. Government companies are subject to government regulations and policies.

Ans. Government companies have several merits, such as financial stability as they receive support from the government, the ability to undertake long-term projects that may not be viable for private companies, the provision of essential services to the public at affordable prices, and the promotion of balanced regional development.

Ans. Some demerits of government companies include bureaucratic interference and delays in decision-making, lack of accountability and transparency, inefficiency due to political considerations, and potential for corruption. They may also face challenges in competing with private companies in terms of innovation and cost-effectiveness.

Ans. Over time, the role of public sector commerce has evolved. Previously, public sector enterprises were seen as the main drivers of economic development and were involved in various sectors. However, with economic liberalization and globalization, there has been a shift towards the privatization and disinvestment of public sector enterprises. The role of the public sector now focuses more on regulation, policy-making, and providing an enabling environment for private enterprises.

Ans. 1. How are government companies different from private companies? Government companies are owned and controlled by the government, while private companies are owned by individuals or entities. Government companies serve public interests and are subject to government regulations. 2. Do government companies receive financial support from the government? Yes, government companies often receive financial support from the government in the form of capital infusion, subsidies, or grants. This support helps them undertake projects and provide essential services. 3. Are government companies more efficient than private companies? Efficiency varies among government and private companies. While government companies may face challenges like bureaucratic interference, private companies operate in a competitive environment that drives efficiency. However, government companies play a vital role in providing essential services and promoting public welfare. 4. Can government companies be privatized? Yes, government companies can be privatized through disinvestment or strategic sales. Privatization aims to improve efficiency, reduce government's financial burden, and introduce competition in the sector. 5. What sectors do government companies operate in? Government companies can operate in various sectors, including energy, telecommunications, transportation, finance, and healthcare. They are often involved in sectors of national importance or where private participation may be limited.