difference between public and private sector

Difference Between Public Sector and Private Sector

Definition of Public Sector

The sector, which is engaged in the activities of providing government goods and services to the general public is Public Sector. The enterprises, agencies and bodies are fully owned, controlled and run by the Government whether it is central government, statement government or a local  government.

There are two types of public sector organizations, i.e. either they are fully financed by the Government through the revenues they raise by collecting taxes, duties, fees, etc. or the government holds more than 51% of the total share capital of the company which comes under various ministries. The enterprises are generally established with service motive. It is the largest sector, which works for the upliftment of the people by providing the following services to the people:

•        Generation of employment opportunities

•        Postal services

•        Providing education and health facilities at low cost

•        Providing security

•        Railway service

Definition of Private Sector

The segment of a national economy that is owned, controlled and managed by private individuals or enterprises is known as Private Sector. The private sector enterprises are divided on the basis of sizes like small & medium enterprises and large enterprises which are either privately or publicly traded organizations. They can be created in two ways, i.e. either by the formation of a new enterprise or by the privatization of any Public Sector Enterprise.

Business entities of the private sector are generally established with the sole objective of making profit and building brand reputation. They provide quality services to the community to win the trust and goodwill from people in order to survive in the long run and compete with the enemies. These enterprises also have to follow the government law and order. It is the largest sector in terms of employees. Although in private sector performance is the basic criterion for job stability, i.e. if you perform well you will get promoted and if you won’t, you will be perished. The major services provided by the Private sector are as under:

•        Quality education

•        Telecommunication services

•        IT services

•        Courier Services

•        Infrastructure development

BASIS OF COMPARISON	PUBLIC SECTOR	PRIVATE SECTOR
Meaning	The section of a nation's economy, which is under the control of government, whether it is central, state or local, is known as the Public Sector.	The section of a nation's economy, which owned and controlled by private individuals or companies is known as Private Sector.
Basic objective	To serve the citizens of the country.	Earning Profit
Raises money from	Public Revenue like tax, duty, penalty etc.	Issuing shares and debentures or by taking loan
Areas	Police, Army, Mining, Health, Manufacturing, Electricity, Education, Transport, Telecommunication, Agriculture, Banking, Insurance, etc.	Finance, Information Technology, Mining, Transport, Education, Telecommunication, Manufacturing, Banking, Construction, Pharmaceuticals etc.
Benefits of working	Job security, Retirement benefits, Allowances, Perquisites etc.	Good salary package, Competitive environment, Incentives etc.
Basis of Promotion	Seniority	Merit
Job Stability	Yes	No

Key Differences Between Public Sector and Private Sector

The following are the major differences between public sector and private sector:

1.       Public Sector is a part of the country’s economy where the control and maintenance is in the hands of Government. If we talk about Private Sector, it is owned and managed by the private individuals and corporations.

2.      The aim of the public sector is to serve people, but private sector enterprises are established with profit motive.

3.      In the public sector, government has full control over the organizations. Conversely, Private Sector companies, enjoys less government interference.

4.      The employees of the public sector has the security of the job along with that they are given the benefits of allowances, perquisites and retirement like gratuity, pension, superannuation fund etc which are absent in the case of the private sector.

5.       In the private sector working environment is quite competitive which is missing in the public sector because they are not established to meet commercial objectives.

In general Public Sector uses Seniority for promoting employees, however, merit cum seniority is also taken as a base for promoting employees. Unlike Private Sector, where performance is everything and so merit is taken as a parameter to promote them

Conclusion

Nowadays, Private Sector is progressing faster because promotes quality not quantity, it encourages talent. Public Sector is full of reservations like reservations for minority section, females, person with disability and many more, here nobody sees talent, it is completely ignored and because of this, competent youths remain unemployed. Although, public sector enterprises give so many facilities to their employees, which makes them satisfied that their job is secured, due to which, all the people are running after it like it is a marathon. However in the Private Sector, your job is never secured, even if you give years to it, you can be fired anytime just because of a single mistake.

Again in the private sector, where performance is king, work load is much, but it keeps you alive and alert, this is missing in the public sector due to which the work sometimes becomes monotonous which creates boredom. One thing is really good in Private Sector i.e. it is corruption free. In Public Sector you have to pay lots of money to the government officers even for a simple work, for no reason. It is an unending debate, both are good at their  places, if the drawbacks are removed, they will surely prove good for the economy.