An Evaluation of Profitability of Public Sector Undertakings (with Special Reference to Iron & Steel Units)

Author:A. K. Agarwala , Arvind Kumar Yadavb*

Abstract:
Earning profit is equally important for all undertakings whether manufacturing or providing services, and whether in public or in private sector. The nationalization of the basic industries and setting up public sector undertaking have been entrusted with the responsibility to look after the requirements of the relevant services as the basis of economic development and also to develop the socio-economic status of the society, by making them available comfortable, economical and effective services/raw materials. It clearly indicates that various units under steel sector being a public sector undertaking should run with adequate profits. Iron and steel is the backbone of almost all the large-scale industries including construction services, as without plant and machinery no industry can produce or manufacture anything. Even the small-scale industries get their primary infrastructure from iron and steel. In more clear terms, a basic industry like iron and steel has to consider itself as one of the infra-structural institutions and has to work as per the requirements of the country's industrial and economic development as a whole. Since poverty and unemployment are the two major problems of the country, the iron and steel industry assumes a wide responsibility to play its role in solving the problem of unemployment and thus, also to reduce the clutches of poverty to a more or less extent as the iron and steel is one of the employment generating industries. In fact, the iron and steel Industry being a basic industry creates a basis for the economic and industrial development, and by making this development possible, it reduces poverty, raises the standard of living of the people and improves the socio-economic status of the masses. All these responsibilities have added a new dimension to the public sector industries in steel sector. If the objective to earn profits is kept in mind in the normal working of steel Industries, public sector undertakings under steel sector cannot fulfill such obligation to the people as well as the country by ensuring adequate supply of iron and steel, which is an infrastructural necessity of almost all the large scale industries. In this research paper the authors have taken all the causes of poor profitability in public sector manufacturing undertakings and also suggested some suggestions for improving the profitability of public sector.

Keywords:Key words: PSU, MOU.

DOI:

International Journal of Trade & Commerce (Vol: 5 Issue:2)