Top differences between Public Sector and Private Sector

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In the Indian economy there are mainly three major sectors Primary Sector, Secondary sector and territory. However it can also be divided into public sector and private sector depending on the ownership and organised and unorganised with ways of operation. The main difference between the private and public sectors of Indian economy is that when the group of individuals hold their right to the properties it is the private sector whereas when the government is the owner it is known as the public sector.

Public sector and Private Sector

Public Sector:

If any property is owned by the government more than the private people it would be called the public sector. The public sector of an economy is provided a range of government services including infrastructure, public transportation, and multi services etc., Funding for public services are usually done through a variety of methods like taxes, financial transfers from other levels of government etc.,

Sometimes the public sector will partner with the private sector to create a public private partnership. These organizations work together to join the delivery service of business ventures to the community. Although the public sector varies among countries depending on the legislation that governs the organizations, generally the public sector focuses on the benefit of the society rather than just who is using the services. Especially low income countries with underdeveloped economies.

Private Sector:

In the India economy when any sector is owned by the individuals and is controlled and organised with the profit motive it would be called the private sector. The private sector tends to make the largest share in the economy in the free market, like capital Based societies. Therefore profit making businesses that are not owned and operated by the government belong to the private sector.

The private sector plays a crucial role in the development of the economy. The capital for the private sector business is arranged by the business owners, shareholders, bank loans etc., Even though the private sector focuses on profit maximization, the private firms help in economic development by enhancing the GDP, employment rate, per capita income etc.,

Some of the types of private sector businesses are 

Partnership business 

Sole proprietorship business 

Trade unions 

Large corporation and MNC’s etc.,

Difference between Public Sector and Private Sector:

Public Sector Private Sector
When a sector is owned by the government it would be called as public sector When any sector is owned by private individuals it is called the private sector.
Public sector runs with a motive of providing services to the society Private-sector runs with the motive of earning profits.
Capital is obtained by public revenue like taxes, bonds, financial transfer from other levels of government etc., Capital is obtained by issuing shares loans in the sector
Job Security
In the public sector has a highly secured job and multiple retirement facilities It doesn't have any retirement benefits allowances
Central Railways, military, education etc., Tata Company pvt ltd., Reliance company pvt ltd., etc.,


All the sectors plays a major role in the development of the economy . The territory sector stands in the lower place though it is an important sector cause the GDP generated from it is less when compared to the Public sector and Private sector. Most of the GDP for the economy is generated from the Public and Private only.

If you want to read more about Difference between Central government and State Government click here.

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