In every country, there are many public undertaking organizations by the central state or local governments. These organizations work on the same lines as that of private enterprises.


Advantages of State Enterprise

  • The credit of the government is greater than that of a private individual. Hence, it can raise funds on favourable terms.

  • A State Enterprise reduces the inequalities in income.

  • The Government can employ the best available talent to organize such enterprises because of the benefits attached to government service.

  • A State Enterprise is generally a monopoly, hence there is little expenditure on advertisement and publicity.

  •  It can look after the welfare of the community.

  • It can minimize the exploitation of workers and consumers.

  • It creates employment opportunities.

  • The idea of such an enterprise is not to make profit, but to ensure regularity of service.



Disadvantages of State Enterprise

  • The efficiency of government management is absolutely lower than that of the private concerns.

  • Nobody bothers about the losses suffered by such an organization.

  • The chances of higher positions being occupied by incompetent persons are greater.