Class 11 Business Studies

Private Public & Global Enterprises

NCERT Solution

Short Answer Type

Question 1: Explain the concept of public sector and private sector.

Answer: In India, there are various kinds of business organizations which are engaged in various economic activities. Some of the organizations are owned by individuals or groups of individuals. These organizations comprise the private sector. Some other organizations are owned by the government and they comprise the public sector. In a public sector company, the government should hold at least 51% stake. The majority stake owner can be the central government or the state government or a combination of central government and one or more state governments. India follows the mixed economy model in which both private players and government companies indulge in business activities. During initial years after independence, public sector companies were started to build the economy which was not in good shape. Many basic industries were thus owned by the public sector.

Question 2: State the various types of organisations in the private sector.

Answer: The various types of organization in the private sector are: proprietorship, partnership, HUF business, cooperative society and joint stock company.

Question 3: What are the different kinds of organisations that come under the public sector?

Answer: The different kinds of organizations which come under the public sector are as follows:

  1. Departmental Undertaking
  2. Statutory Corporation
  3. Government Company

Question 4: List the names of some enterprises under the public sector and classify them.


Indian Railways, Post and Telegraph DepartmentDepartmental undertaking
Life Insurance Corporation of India, National Highways Authority of IndiaStatutory Corporation
Steel Authority of India Limited, Coal India LimitedGovernment Company

Question 5: Why is the government company form of organisation preferred to other types in the public sector?

Answer: Departmental undertakings and statutory corporations have a higher degree of government control over them. This hampers their efficiency and productivity. A government company is established according to the Companies Act. Hence, a government company has a separate identity which is different from the government. It has a better degree of autonomy compared to other forms of government owned business organizations. So, a government company is least interfered by the government ministers or officials. These are the reasons, a government company is preferred over other types in the public sector.

Question 6: How does the government maintain a regional balance in the country?

Answer: During the colonial rule, industries could develop only near the port towns because of obvious reasons. This meant that other areas of the country remained backward. When the government began implementing the Five Year Plans, rectifying regional imbalance in development was one of the major goals. Many industries were set up in backward areas. For example; the steel plants by SAIL were set up in Bokaro (Jharkhand) and Bihlai (Madhya Paradesh). This helped in development of ancillary units in surroundings areas. The government also gives some tax benefits if some private company starts operation in backward areas. Thus, various policies are made to remove regional imbalance in development in the country.