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 companies are divded on the basis of sizes which are 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.
The Private sector is a part of country’s economic system that is run by individuals and companies, rather than the government. Even the vast expansion of public sector, the contribution of the private sector continued to be very large. This was due to the development of medium, small and very small or micro industries.
Also, the contribution of the products of cottage, and village industries and the small, scale industries is the major portion of the wholesale and retail trade. The contribution of private sector towards national production is higher than the public sector, Private sector is dominent in road, ship, and airways transport and also in consumer industries.
Major private companies
* Aditya Birla Company
* Reliance Industrial companies
* Tata Group of companies
* WIPRO Limited
* Hindustan Unilever Limited
* ICICI Bank Limited.
Functions of Private Sector
* The main function of private sector is to create innovation and modernization. The profit motive drives them to invent, innovate new techniques of production and manage the productive activities in a scientific manner.
* Develop and maintain infrastructure and services.
* Promote and expand existing businesses.
* Promote human capital development, to help vulnerable groups especially to participate in the labour market and encourage community development by promoting community business and co-operatives, local exchange systems and informal credit etc..
* Promote small, micro and medium enterprises (SMME) through supply side measures and demand side measures and attract investment in the city.
In India, being a mixed economy, has assigned a great importance on the private sector of the country for attaining rapid economic development. The most dominant sector of India, i.e., agriculture and other allied activities like dairying, animal husbandry, poultry etc. is totally under the control of the private sector. Thus private sector is playing an important role in managing the entire agricultural sector and thereby providing the entire food supply to the millions.
Moreover, the major portion of the industrial sector engaged in the non-strategic and light areas, producing various consumer goods both durables and non-durables, electronics and electrical goods, automobiles, textiles, chemicals, food products, light engineering goods etc., is also under the control of the private sector. The social and economic challenges before the country are great. To meet the targets in structural transformation and economic growth public sector and private sector must join together