Difference between Private and Public Sector

Private Sector and Public Sector are two different types of sectors which include enterprises wholly and/or partly managed and owned by individuals and the Central or State Government.

What is Private Sector?

The sector, which includes all those enterprises which are managed and owned by individuals or groups of individuals is known as Private Sector. The private sector is the section of the economy formed up of profit-seeking companies. Companies in the private sector face little state regulation and compete for the money of consumers.

Individuals or corporate entities own, control, and manage the private sector firms. Small, medium and large-scale organisations all are viable. These organisations are formed to profit from their business operations, and they can raise funds from individuals, groups, and the general public.

The private sector includes sole proprietorships, partnerships, cooperative organisations, corporations, and multinational business owners. They also prioritise meeting the demands of their clients in order to thrive in the long run. Since the adoption of the New Economic Policy by the Government of India in 1991, nearly every industry in the nation has been opened to the private sector. It has resulted in a tremendous expansion in the size and growth rates of the Indian economy.

In general, private firms provide the most jobs in an economy. They are primarily concerned with an employee’s performance in order to ensure his or her job stability. The examples in the list below are some of the most significant private sector instances in an economy:

• Private schools, colleges, and universities, as well as the various professional courses available, provide educational services.
• A country’s telecommunications services
• IT services that are often global in nature 

In most cases, a private enterprise is founded by establishing a new corporation. Existing public-sector enterprises, on the other hand, could be privatised. Typically, these businesses are run with a single goal in mind to maximise profit. This strategy is often promoted by establishing a brand reputation. These businesses must adhere to government standards and laws. However, these are not regulated by the government and frequently prioritise quality over quantity.

What is Public Sector?

The sector, which includes all those enterprises which are managed and owned partly or wholly by the Central or State Government by the Central or State Government is known as Public Sector. The Public Sector is the sector that is involved in the operations of supplying government products and services to the general public. The government owns, controls, and runs all enterprises, agencies, and bodies, whether it is central government, state government, or local government.

There are two types of public sector organisations: those that are wholly funded by the government by collecting taxes, charges, and fees, and those that are partially funded by the government by holding more than 51% of the total share capital of a corporation that comes under several ministries. The enterprises were founded with the goal of providing a service.

Some of them may be non-profit organisations, while others may also engage in commercial activity. Its primary goal is to provide goods and services to the general public at lower prices than private firms. Its primary goal is to ensure the general welfare of a country’s citizens. 

It is the major sector that aims to improve people’s lives by offering the following services :

• Creation of new job opportunities
• The postal service
• Providing low-cost education and healthcare services
• Providing security
• Railway transportation services.

Difference between Private Sector and Public Sector