Importance or Necessity of State Enterprise - QS Study
QS Study

Importance or Necessity of State Enterprise

If the state gets the ownership on continual at any business directly or indirectly incest it that business is called as the state enterprise. The business controlled or operated by the government is known as a state enterprise. A private organization can’t work for social welfare because of their profit-maximizing mentality that is why state enterprises are established. Nowadays existence of state enterprise is seen with a view to doing welfare of public and necessities of state enterprise arc given below:

Abolition of monopoly: By establishing large size business combination private owners want to create a monopoly in business. Which is not good for any state involved in public welfare, state enterprise is established to stop such monopoly.

Operating public welfare: Main objective of state enterprise is public welfare. That’s wily organizations for public welfare such as WASA, DESA, and BRTC etc. established and operated under government control so that people can get service facilities.

Balanced distribution of wealth: It plays vital a role in the balanced distribution of wealth by industrialization creating employment opportunities, distribution of products at fire price etc. As a result, resources don’t get accumulated to a certain class of people.

Maintaining price stability: State enterprise prevents ups and downs in products price by producing and distributing products according to the demand of public-private enterprises often increase the product price to make more profits. That’s why government directly controls the churchly to maintain the price stability.

Operating defense industry: Government establishes and operates defense industries with a view to protecting the country from external enemies and to ensure the security of the country. If the charge of these industries given to private ownership the peace and discipline will be destroyed and security of the public will be hampered so it’s better that these industries stay under state ownership.

Balanced industrialization: While industrialization, the government should consider every area and areas development of country without these government should try to develop all the industries in the country. That’s why balanced industrialization becomes possible.

Establishing basic and heavy industries: For establishing of heavy industries like iron and steel industries which involve of money. That’s why private companies don’t come forward to invest in these industries. But these industries are really needed in every country so these industries established as state enterprise because the government has a huge capital in their hand.

Proper utilization of natural resources: State organizations take the responsibility to protect country wealth such as minerals Forests, fisheries, and wild regencies. There are many precious natural resources which need proper presentation and utilization. And state enterprise plays important role in this regard.

Operating secret industry: There are some secret industries like printing take, printing confidential documents; making weapons of modern technology in these sectors maintaining secrecy is highly needed. That’s why these industries are established as a state enterprise.

Research and development: Research is needed for invention developing product quality, expansion of technology etc. These research activities are very costly. Private organizations cannot provide much money. Only state enterprise can give the facility of research and development.

From above discussion, we can say, state enterprise plays a very important role in public welfare and developing the economic condition. So government should try to increase acceptability of state enterprise by efficient management, proper planning, and effective supervision.