It is becoming apparent every day that the role of the public sector inroads into the realm of public enterprise. Public sector investment under year plans has dropped to 50 percent of the total. Much of the

public sector is commonly acknowledged as not pulling its weight. The public sector appears to have failed to "occupy of commanding position in the economy. A new distribution of the role of the public sector is called

for; and the trends justify this demand. For example, in the sixth plan, public sector investment was about 53 percent of the total. By the time, the seventh plan was finalised, it was recognised that the private sector

would have a higher level of investment than the public sectors investment of 48 percent of the total seventh plan investments, Well below the peak of 60 percent reached in 1970. The development of basic and infrastructural sector was left to the public sector by the 1956 policy statement. This also seems to have received a setback, because most of the major investments in steel, furor the joint sector, Even in power generation the inability of the public sector to keep

pace with the growing energy needs of the economy has promoted the govt. to allow private sector participation in the power generation and distribution. Privatisation appears to have been encouraged in an indirect

manner, namely, by setting up additional capacity in private and joint sectors, without of course, privatising individual public sector units.

The factors which have weakened the base of the public sector in recent years and are likely to stand in the way of its future growth may be summarised as follows.

The principal contributing factor that has brought down the public sector from its commanding position before the 1980's is the 'poisoned environment in which the public sector has to function today". The environment is

poisoned by hostile public opinion because of the poor performance of some of the Central Government enterprises and almost all of the State enterprises resulting in huge losses. And the Government has failed to highlight the successful working of others. With the result that only the 'dark' side of public enterprise is exposed. Had the govt. not taken over sick textile mills, main marks, and applied its mind seriously to remove

obstacles and corrected its policies concerning public sector, the target set up by the planning commission of an enterprise earning a surplus of 10 percent could have been achieved. The second cause is the setting up of enterprises in directions of industrial activity including consumer industries and even in law investment areas

without giving adequate attention to detailed scientific project planning. The third factor is the induction of people having political clout into the management cadre in place of dynamic and competent as well as experienced managers. Further, the Boards of directors are packed with persons who are prone to create problems rather than solve them. On top of this, the top

management posts are often left unfilled for long periods of time. Another factor which is militating against the further growth of public sector is the strong lobby that is building up in favour of 'Privatisation'.