CBSE Questions for Class 11 Commerce Business Studies Private Public And Global Enterprises Quiz 7 - MCQExams.com

1.  A government company is managed, financed, and audited just like any other private sector company. It can, therefore, secure greater flexibility, freedom of operation, and quickness of action in running the enterprise.

In the industrial policy resolution 1956, the Government of India has specified the approach towards the development of the industrial sector. In the 1956 resolution on Industrial policy, 17 industries were reserved for the public sector.
Hence, B is the correct option.

The primary objectives of privatizing public sector enterprises are:
1. Releasing the large number of public resources locked up in nonstrategic Public Sector Enterprises (PSEs), so that they may be utilized on other social priority areas such as basic health, family welfare, and primary education.
2. Reducing the huge amount of public debt and interest burden;
3. Transferring the commercial risk to the private sector so that the funds are invested in able projects;
4. Freeing these enterprises from government control and introduction of corporate governance; and
5. In many areas where the public sector had a monopoly, for example, in the telecom sector the consumers have benefitted from more choices, lower prices, and better quality of products and services.
Hence, A is the correct option.

The following are the roles played by public sector in the economy:

a. Regional balance: : The government is responsible for developing all regions and states in a balanced way and removing regional disparties.
b. Economies of scale: Where large scale industries are required to be set up with huge capital outlay, the public sector had to step in to take advantage of economies of scale
c. Check over concentration of economic power: The public sector acts as a check over the private sector. In the private sector there are very few industrial houses which would be willing to invest in heavy industries with the result that wealth gets concentrated in a few hands and monopolostic practices are encouraged.
d. Import substitution:  Several public sector companies like STC and MMTC have played an important role in expanding exports of the country
e. Development of infrastructure: The development of infrastructure is a prerequisite for industrialisation in any country. It was only the government which could mobilise huge capital, coordinate industrial construction and train technicians and workforce.

Hence, D is the correct option.