NCERT Solutions Class 11 Business Studies Chapter 3 Private, Public and Global Enterprises

NCERT Solutions Class 11 Business Studies Chapter 3 Private, Public and Global Enterprises

NCERT Solutions Class 11 Business Studies Chapter 3 Private, Public and Global Enterprises: National Council of Educational Research and Training (NCERT) Class 11 Business Studies Chapter 3 Solutions – Private, Public and Global Enterprises.





Business Studies


Chapter Name

Private, Public and Global Enterprises

Exercise Solutions

Short Answer Questions:

(1) Explain the concept of public sector and private sector.

Ans: The public sector consists of various organisation owned and managed by the government. These organisations can be partly or wholly owned by the central or state government.

The private sector consists of business owned by individuals or group of individuals.

(2) State the various types of organisations in the private sector

Ans: The various types of organisations in the private sector are – sole proprietorship firm, partnership firm, Joint Hindu family business, Joint stock company, co-operative society.

(3) What are the different kinds of organisations that come under the public sector?

Ans: The different kinds of organisations that come under the public sector are – departmental undertaking, statutory corporation, Government Company.

(4) List the names of some enterprises under the public sector and classify them.

Ans: The classification of public sector are -> departmental undertaking (Railway, Post, Telegraph, Insurance etc) Statutory corporation (Reserve bank of India, State Trading corporation of India, LIC) Government company (GAIL, BSNL, Indian Oil Corporation LTd)

Private, Public and Global Enterprises Solutions

NCERT Solutions – Class 11 Business Studies Chapter 3 Private, Public and Global Enterprises

(5) Why is the government company form of organisation preferred to other types in the public sector?

Ans: Government company form of organisation is preferred to other forms of public sector is due to its advantages as discussed below:

(a) Government company enjoys autonomy in all management decisions and takes action according to business prudence.

(b) A Government company can be established by fulfilling the requirements of the Indian companies Act and does not require to follow any separate Act of the parliament.


(6) How does the government maintain a regional balance in the country?

Ans: The government is responsible for developing all regions and states in a balanced way and removing regional disparities. After independence, the government laid down in its five year plans, the particular attention would be paid to those regions which were lagging behind and public sector industries were deliberately setup. Four major steel plants were setup in backward areas to faster economic development and provide employment.

(7) State the meaning of public private partnership.

Ans: It is defined as a relationship between public sector and private sector for allocation and completion of developmental projects. This model allocates tasks, obligations and risk among the public and private partners in an optimum manner. These involves government entities, ministries, government departments, municipalities etc.


Long Answer Questions:

(1) Describe the Industrial policy 1991, towards the public sector.

Ans: Government of India had introduced four major reforms in the public sector in its new industrial policy in 1991. The main elements of the government policy are as follows:

(i) Restructure and revive potentially viable Psu’s.

(ii) Close down Psu’s, which cannot be revived, and bring down governments equity in all non-strategic Psu’s to 26% or lower if needed.

The main objectives of industrial policy 1991 are as follows:

(a) Reduction in the number of industries in the public sector from 17 to 8 and then to 3. In 1991, only 8 industries were reserved for the public sector i.e. – atomic energy arms and communication, mining and railways.

(b) Disinvestment of shares of a select set of public sector enterprise. It involves the sale of equity shares to the private sector and the public. The government had taken a decision to withdraw from the industrial sector and reduce its equity in all undertakings.

(c) Memorandum of understanding. Under this management is to be granted greater autonomy but held accountable for specified result.


(2) What was the role of the public sector before 1991?

Ans: The industrial policy resolution, 1956 has laid down certain objectives for the public sector to follow so as to accelerate the rate of growth and industrialisation. The public sector was given lot of importance but at the same time mutual dependency of public and private sector was emphasised. The 1991 industrial policy was radically different from all the earlier policies where the government was deliberating disinvestment of public sector and allowing greater freedom to the private sector. In the industrial policy of 1948, the government of India had specified the approach towards the development of industrial sector.


(3) Can the public sector companies compete with the private sector in terms of profit and efficiency? Give reasons for your answer.

Ans: Public sector companies cannot complete with private sector in terms of profit and efficiency due to following reasons:

(a) In case of profit earned, the private sector companies have more amount of profits earned than public companies due to the service motive of it.

(b) Public companies faces lot of redtapism and bureaucracy in terms of its management whereas a private company does not have these constraints and can be managed efficiently.

(c) Many a times a public company may have some budget constraint interms of financial resources as they have to depend upon the government for allocation of funds whereas a private company may not have to face these problem.


(4) Why are global enterprises considered superior to the business organisation?

Ans: Global enterprises are considered as superior to the business organisation due to its following benefits:

(a) Huge capital resources – These enterprises posses huge financial resources and the ability to raise funds from various sources in the form of equity shares, debentures, benefits:

(b) Advanced Technology: These enterprises have technological superiorities in their method of production and are able to conform to international standards and quality specification.

(c) Centralised control: They have their headquarters in their home country and can exercise control over all branches and subsidiaries.

(d) Product Innovation: These organisations are characterised by having highly sophisticated research and development departments engaged in the task of developing new products.


(5) What are the benefits of entering into joint ventures and public private partnership?

Ans: The benefits of entering into a joint venture are as follows:

(a) Increased resources and capacity: Joining hands with another adds to existing resources and capacity enabling the joint venture to grow and expand more quickly.

(b) Access to new markets and distribution network: When a company or organisation enters into a joint venture with a partner from another country, it opens up a vast growing market for it.

The benefits of entering into a public private partnership are as follows:

(a) Suitable for high priority projects and public welfare like infrastructure sector. It is used in the government projects.

(b) Public private partnership is a contract between public sector authority and private party. The revenue earned is shared between government and private enterprises in an agreed ratio.

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Updated: May 8, 2023 — 2:35 pm

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