Gone are the days, when only the Public Sector was prevalent in the economy. At present, many countries have adopted the policy of Privatisation, through which Private Sector is also gaining importance. For the progress and development of any country, both the sectors must go hand in hand as only one sector cannot lead the country in the path of success. The private sector comprises of business which is owned, managed and controlled by individuals.
On the contrary, public sector comprises of various business enterprises owned and managed by Government. Such organizations are either fully or partly owned by the center or state and come under the separate ministry. Some of the public sector organizations are set up by a special act of Parliament.
A cut-throat competition between both the sectors, to prove itself better over the other sector. So, the article attempts to outline the differences between public sector and the private sector in tabular form.
Content: Public Sector Vs Private Sector
Comparison Chart
Definition
Key Differences
Conclusion
Comparison Chart
Basis for 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.
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
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 the Government fully finances them through the revenues they raise by collectingtaxes, duties, fees, etc. or the government holds more than 51% of the total share capital of the company which comes under various ministries. Theenterprises are 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 companies are divided on the basis of sizes like small & medium enterprises and large enterprises which are either privately or publicly tradedorganizations. 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 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 isthe basic criterion for job stability, i.e. if you perform well you will get promoted and if you won’t, you will be terminated. The major services provided by the Private sector are as under:
Quality education
Telecommunication services
IT services
Courier Services
Infrastructure development
Key Differences Between Public Sector and Private Sector
The following are the major differences between public sector and private sector:
Public Sector is a part of the country’s economy where the control and maintenance are in the hands of Government. If we talk about Private Sector, it is owned and managed by the private individuals and corporations.
The aim of the public sector is to serve people, but private sector enterprises are established with the profit motive.
In the public sector, the government has full control over the organisations. Conversely, Private Sector companies enjoy less government interference.
The employees of the public sector have the security of the job along with that they are given the benefits of allowances, perquisites, and retirement likegratuity, pension, superannuation fund, etc. which are absent in the case of the private sector.
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 considered 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, a person with a disability and much more, here nobody sees talent, it is completely ignored and because of this, competent youths remain unemployed.
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, the workload is much, but it keeps you active, 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.
Public sector organisations are owned, controlled and managed by the government or other state-run bodies. Private sector organisations are owned, controlled and managed by individuals, groups or business entities.
The aim of the public sector is to serve people, but private sector enterprises are established with the profit motive. In the public sector, the government has full control over the organisations. Conversely, Private Sector companies enjoy less government interference.
Public sector in being financed from individuals, families or business.In other words, a private sector involves transactions from individuals, families or business. Examples of public sector are courts, government agencies, etc. Examples of a private sector are consulting firms, fast-food restaurants, hotels, etc.
A public company can sell its registered shares to the general public. A private company can sell its own, privately held shares to a few willing investors. The stocks of a public company are traded on stock exchanges. The stocks of a private company are owned and traded by only a few private investors.
The private sector consists of business enterprises owned by individuals or a group of individuals. The various forms of organisation are sole proprietorship, partnership, joint Hindu family, co-operative and company. The public sector consists of business enterprises owned and managed by the government.
Some of the main differences between private limited companies and public limited companies include: public companies can offer their shares for sale to the general public. 2 directors are required for public companies whereas only one is needed for a private company.
Let's see some of the similarities between the two. Customer service oriented – Both sectors are very customer oriented. The customer for the private company is one that has agreed to pay for their services, where the customer for the public sector is its citizens as it relates to public service.
Privacy is the state when an individual is free from public interruption and intrusion. The word privacy is derived from the word 'private' which means the role of the public is limited, so the term privacy refers to a condition where a person is apart from public attention and observation.
Public Expenditure are carried out by national and local government and public sector enterprises. Private Expenditure is carried out by individuals and businesses that are not government owned. In Favor of private spending. Individuals are best placed to choose how to spend their money.
Public sector businesses are accountable to and controlled by the government whereas private sector businesses are owned and controlled by individuals or groups of individuals.
The main categories of difference are trading of shares, ownership (types of investors), reporting requirements, access to capital, and valuation considerations.
Public sector companies serve the purpose of providing basic public services to larger people, whereas private sector companies are entirely profit-driven.
Private companies have the advantage of being a separate legal entity.They also have limited liability compared to public companies, and provide an easier transfer of shares. This lack of liability occurs because private companies don't impact the personal worth of shareholders and investors.
In most cases, a private company is owned by the company's founders, management, or a group of private investors. A public company is a company that has sold all or a portion of itself to the public via an initial public offering.
What is the role of the private sector? The private sector plays a vital role in the economy by creating jobs, providing goods and services, and stimulating economic growth. It is an important source of tax revenue for governments.
Public-private partnerships allow large-scale government projects, such as roads, bridges, or hospitals, to be completed with private funding. These partnerships work well when private sector technology and innovation combine with public sector incentives to complete work on time and within budget.
In short, the shares of a public company are traded on a stock exchange while the shares of a private company are not. This means a private company is generally owned by its founders, managers or investors.
A public limited company (PLC) is an organisation that is owned by shareholders, and managed by directors. Members of the public can purchase stock, and most pay out dividends once or twice a year. A private limited company (Ltd) does not publically trade shares and is limited to a maximum of fifty shareholders.
there are more complex accounting and reporting requirements. there is a greater risk of a hostile takeover by a rival company as the company cannot control who buys its shares. shareholders will expect to receive a percentage of the profits as dividends. shareholders may clash when making decisions about the business.
And there are different ways to look at privacy, such as: physical privacy (for instance, being frisked at airport security or giving a bodily sample for medical reasons) surveillance (where your identity can't be proved or information isn't recorded) information privacy (how your personal information is handled).
Special - something that is out of the ordinary / significant "Today is a special day!" Specific - it refers to only a part of something "I want to target this specific sector in our organization" Private - something that only belongs or is restricted to a person or thing / exclusive "That building is my father's ...
Work-life balance can be another important factor when comparing public- and private-sector jobs. Public-sector jobs often provide more stability, regular work hours, and less overtime, leading to a better work-life balance.
Many of the differences between public and private procurement lie in the differing methods of funding. For one, private companies can easily transfer money from one department to another if business conditions end up changing, a flexibility that's not afforded by government budgets.
Public finance involves collecting and managing government revenue and expenditure to promote public interests. While private finance is focused on the financial activities of individuals, households, and businesses in the private sector.
The private sector tends to make up a larger share of the economy in free market, capitalist based societies. Private sector businesses can also collaborate with government run agencies in arrangements called public-private partnerships.
OPC allows for a single individual to own and manage the business whereas other business entities like Partnership Firm, LLP i.e. Limited Liability Partnership, PLC i.e. Private Limited Company and Public Company require two or more individuals to partner and run a business.
In public companies, investments can easily be bought, sold or traded, but the absence of a market makes trading stock in private companies more difficult. This lack of market liquidity reduces a private company's value.
Though there are variations from one country to another, the public sector normally includes such services as the military, police, public transit, infrastructure care, public education, health care, and of course, the government itself.
The private sector employs workers through individual business owners, corporations or other non-government agencies. Jobs include those in manufacturing, financial services, professions, hospitality, or other non-government positions. Workers are paid with part of the company's profits.
Examples of public sector institutions include the police force, fire department, and public schools. These types of institutions are often funded by local or state taxes and provide services to citizens in the community. Other examples include national parks, public libraries, and public transportation.
What can be the examples of privately held companies? Companies such as Mars, Ikea, Dell, Cargill, and Facebook have been privately owned. However, most companies in this category are small businesses.
The private sector is the part of the economy, sometimes referred to as the citizen sector, which is owned by private groups, usually as a means of establishment for profit or non profit, rather than being owned by the government.
Urban infrastructure: streets, parks, public lighting, gardens, etc. Transport infrastructure: land routes (such as freeways, roads, or highways), maritime routes (such as ports and canals), air transport (such as airports),and rail (such as railways and train stations).
Public sector means that you work for the government of the United States, a state, the District of Columbia, a territory or possession of the United States, a city, a municipality, a township, a county, a parish, or a similar government.
The private sector is run by individuals or firms and not the government. Some of its types include sole proprietorship, company, and partnership firms.
These banks are under the control of a private individual. Public Sector Banks are the banks whose more than 50% shareholding lies with the central or state government. Private Sector Banks are the banks whose majority of stake is held by private corporations or individuals.
Public sector management is leadership that relates to or controls the interests of a collective, such as the nation. It's tied to the government at the federal, state and local levels.
A private organization is any partnership, corporation, person, or agency that is not operated by a profit or a public body. It includes all businesses that are for-profit that are not government owned or operated.
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Gone are the days, when only the Public Sector was prevalent in the economy. At present, many countries have adopted the policy of Privatisation, through which Private Sector is also gaining importance. For the progress and development of any country, both the sectors must go hand in hand as only one sector cannot lead the country in the path of success. The private sector comprises of business which is owned, managed and controlled by individuals.
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