Financial Surplus in Public Sector

In view of the huge investment of around Rupees sixty thousand crores involved in public sector units of the Central and State governments (G. I. 1982-83), it is necessary to examine how far public sector generates financial surpluses and what determines their quantum. From the very inception of economic planning in India, public sector was designated to play a key role not only in setting up new units but also in generating investible surpluses. The Second Five Year Plan stipulated that "an enlargement of the savings of public authorities is urgently necessary if the State is to discharge efficiently the new and growing responsibilities it is being called upon to shoulder" (P.C., 1956, p. 90). In the Seventh Five Year Plan it is again emphatically declared that "only in the measure that the public sector generates investible surpluses, can it play its indispensable social role of providing an adequate infrastructural base for the economy.......” (P.C., 1985-90, p. 6). Having gone through more than three decades of planned growth in which public sector played an important role in setting up new industries, it would be only appropriate to examine how far public sector has succeeded on the savings front. This is a question that is of considerable concern to the planners and policy makers.