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Public-Private Partnership (PPP):

1. Public-private partnership is a new arrangement initiated by Indian government between public and private enterprises.
2. In 1991, the Indian government adopted the policy of liberalization, privatization and globalization. Owing to the policy of globalization many foreign companies entered into Indian market. They brought several products and services which were earlier not available in India.

3. International companies were invited to make investment in India, set-up factories and establish market. However, India did not have modern and sufficient infrastructure to give proper platform to these companies. For example, India did not have very good roads, good connectivity within various regions through roads ahd communication, airports, bridges, dams, electricity, etc. Unless these infrastructural facilities are raised, foreign countries cannot be lured to India.

4. Generating such infrastructure in the country required massive investment. For example, for providing air services we need airport and other allied services. For new and modern foreign cars to be introduced in Indian market a good roads are must. For all these infrastructural development, government needed massive investments which was not possible for the government.

5. It was possible that private sector which was capable of such high investments be given the task of raising the required infrastructure in the country. But at the same time governments feared the private sector would become economically very strong and dominate the country. Hence, the India government thought of a middle way out. It proposed a new arrangement of Public-Private Partnership.

6. Under the PPP arrangement government combined public i.e. government sector with private sector for together raising infrastructure in the country. For example, government (public sector) gave land to private enterprise for developing infrastructure. The private enterprise would then put its own money raise the infrastructure as per government’s specifications. To recover its investment, the private enterprise would be allowed to collect fee from the beneficiaries of that services for a fixed duration. For example, Ahmedabad-Vadodara express highway is built under PPP arrangement. The private enterprise built it and now it collects a toll fee from the passers. Once the investment is recovered the private enterprise will take away its stake from the express highway.

To develop their products and services global enterprise brings changes in the life style of the people the countries in which these companies operate. For example, global enterprises have changed the way we eat. Due to their marketing strategies and options we now eat burgers and pizza and drink coffee in cafe quite frequently.

Global enterprise invests very heavily ;n a country and so in return the country has compromise with some of its rules, regulations and policies. In many cases they can even ‘ influence the economic policy of the country by influencing the political leaders.

Public utility:

• Basic facilities like water, electricity, transportation, communication, cooking gas, sewage, etc. that are needed by people on a daily basis are called public utilities.
• Public utilities form a part of basic infrastructure of any nation. A nation needs to provide these utilities to every city, town and village.
• Every citizen has a right to avail and use these utilities irrespective of his caste, sex or income.
• Government tries to provide public utilities at nearest locations to each citizen.
• For example, we have bus-stands near our house, we get clean water to drink, electricity, sewage facilities, etc.
• Any deterioration in the quality of these services can affect human health and life badly. To see that these facilities are available to all on a continuous basis government joined hands with private sectors. Private companies like Torrent ‘ Power supplies electricity in few cities of Gujarat, Adani gas provides cooking
  gas lines, etc.
• It is quite possible that private sectors can monopolize the market if strict regulations and policies are not framed and observed by the government. Hence, government takes several measures to safeguard the interests of citizens and protect them from exploitation of private sectors.
• Similarly, monopoly existed at government level too. In olden times, government owned few sectors and so the customers suffered due to monopoly of the government.
• Later, by a law of parliament other private companies were also allowed to operate and hence the market became open. For example, more than one company and even private companies were allowed to provide services of telecom. This led to better, faster and cheaper telecom services in the nation.

However, government keeps a control over these companies to see that customers are not exploited.

• At local level the public utility services are raised and managed by village panchayat, taluka panchayat, zilla panchayat, nagar-palika or mahanagar-palika.
• The state government company or corporations takes care of utilities like transportation, electricity, health centres, etc.
• At national level, the central government, companies or corporations provide utilities like Post and Telegraph, Railway, Telecommunication, etc. to the entire nation.

A business enterprise operating in various countries is called a global enterprise. Global or transnational enterprises produce, sell and invest across the world. Global enterprises are highly organized companies which make use of factors of production of the world and global wealth to earn profit from the world market. Coca-Cola, Pepsi, Cadbury, Nestle, Ford, Hyundai, Tata, Bina, etc. are all very strong global enterprises.

Global enterprises are very strong financially, Many times they can even afford to operate at very low profits or even losses that too for a very long period in order to penetrate into the market of a country. Since they are very sound financially they can produce and sell at a massive scale.

An enterprise which operates within the political boundaries of a country is known as a domestic or a local enterprise. The business policies of domestic enterprises are framed by the country as per the business and social environment of the country.

A government company has an independent legal entity and hence it can sue or can be sued as individuals in the court of law. Just like any other company it can also own property or enter into contract with any individual or company.

When a business is managed by an individual or group of individual with the objective of earning profit it is known as a private sector enterprise or private sector or even private enterprise.

Basic facilities like water, electricity, transportation, communication, cooking gas, sewage, etc. that are needed by people on a daily basis are called public utilities.

When a business unit undergoes joint venture with a business unit of a foreign country the market expands and even a new market may emerge. For example, when an Indian company enters into a joint venture with a foreign country, the market expands in India due to the new products, services, brand and strategies that the foreign country offers.

Joint ventures aim at making maximum use of resources and expertise available with both the enterprises to expand the business, share and enjoy the profits jointly and also jointly bear the risk and loss.

A business enterprise operating in various countries is called a global enterprise. Global or transnational enterprises produce, sell and invest across the world. Global enterprises are highly organized companies which make use of factors of production of the world and global wealth to earn profit from the world market. Coca-Cola, Pepsi, Cadbury, Nestle, Ford, Hyundai, Tata, Birla, etc. are all very strong global enterprises.

• At local level the public utility services are raised and managed by village panchayat, taluka panchayat, zilla panchayat, nagar-palika or mahanagar-palika. The state government company or corporations takes care of utilities like transportation, electricity, health centres, etc.
• At national level, the central government, companies or corporations provide utilities like Post and Telegraph, Railway, Telecommunication, etc. to the entire nation.

• Joint enterprise refers to association of two or more business units having common interest.
• Joint venture is mutually beneficial to both the parties. They share each other’s strategies, rich experience and knowledge to expand or create a new market. Joint venture rolls out new products and services in the market. It also increases employment opportunities for people.
• Due to expanded market and employment, government’s tax revenue increases.
• Several innovative products are introduced in the market. These products increase the standard of living.
• Economy may also get advantage of large scale-low cost production, better and efficient processes and hence higher productivity.

Global enterprise:

A business enterprise operating in various countries is called a global enterprise. Generally, in the initial stages an enterprise works at domestic level. Later, with the experience of domestic business when they spread their wings in foreign countries, they become multinational or transnational enterprise. Moreover, when such enterprises starts operating in several countries they are also called global companies or global enterprise.
Global or transnational enterprises produce, sell and invest across the world. Global enterprises are highly organized companies which make use of factors of production of the world and global wealth to earn profit from the world market.

Coca-Cola, Pepsi, Cadbury Nestle, Ford, Hyundai, Tata, Birla, etc. are all very strong global enterprises.

Forms of public sector:
Out of the several forms of public sectors few are:
(A) Government department:

• A public sector unit run and managed either by state or central government as per the laws, rules and regulations of either state or central government or both is called a government department. The employees working in these units are called government employees.
• For example, Postal department, Railway etc. are government departments.

(B) Public corporation :

• Public corporation is a corporation which comes into existence through a special act of Parliament or Legislative Assembly i.e. Vidhan Sabha. The authority to run these units, the powers, duties, rights and responsibility and labour laws are all as per the special act passed in the Parliament.
• For example, Indian Airlines, Food Corporation of India, Gujarat State Textbook Board etc. are all public corporations.

(C) Government Companies

• A company established as per the Companies Act and in which minimum 51% state is with State or Central Government or both together is called a government company. Since the government owns the largest stake of shares in such companies they are called government companies.
• For example, Hindustan Machine Tools (HMT), Hindustan Aeronautics Ltd., etc.

• When a business unit undergoes joint venture with a business unit of a foreign country the market expands and even a new market may emerge. For example, when an Indian company enters into a joint venture with a foreign country, the market expands in India due to the new products, services, brand and strategies that the foreign country offers.
• Many companies who have already established market in their countries, after saturation join hands with enterprises of other countries for entering into new market and making profit.

A very vast difference can be seen when one moves from one region to another. The differences can be seen in culture, fashion, food habits, religion, etc. Based on these aspects the preference of people living in those regions also vary. In order to tap the market of each region one needs to consider the fundamental values of each region.

Global enterprises give priority to regional aspects, while making investment, and production and distribute their resources accordingly in each country. They understand that different countries have different religions, culture and social and economic set-up. They also are very well aware about the behavioral patterns and mindset of people of each region. Based on their rich knowledge and research they plan separate strategies for each country and even state and expand their business. For example, McDonalds have highly changed their product range and taste as per the taste and preference of Indians.

In 1991, India adopted the policy of liberalization, privatization and globalization. As a part of these policies due importance was given to the private sector. Also, foreign countries were allowed to enter into Indian market.

• Private sector expanded in all the areas in which they were allowed to operate. They invested huge capital in all the possible industries that too in all the parts of the country. As a result Indian economy grew drastically. Millions of people got employment and their living standards improved.
• Though public sector was given an opportunity due to weaknesses of public sector, they took Indian economy to great heights and left public sector far behind.
• Today, private sector boasts of a very high economic contribution in India’s growth. It holds a lion’s share in Indian economy. Although private sector can be considered as old as mankind but its role and importance has been evergrowing. Realizing the contribution and overall development that the private sector has made, the government makes continuous efforts to motivate and strengthen this sector.

Correct option is (B) Such industries require very huge investment

Correct option is (A) To set-up basic enterprise

Correct option is (B) 1956

Post and telegraph, railways, airways, telecommunication, etc

Transportation, electricity, internal roads, health centers, water, etc