Objectives of State Enterprise - QS Study
QS Study

Objectives 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. It can be either formed by the government or the government may take the ownership and custody of any private company.

At the end of the eighteenth century, a revolutionary change occurred in the industry and production systems turned into factory based. At the same time, capitalism developed drastically due to Laissez Faire. As a result, rich and poor two classes of people evolved. People started to take some action against this, consequently, after the 1st World War, the state enterprise was seen in many countries of the world. There are some objectives of state enterprise which are given below:

To do public welfare: its main objective is to do welfare of the country workers and people as a whole. The industries which are formed for people welfare are water, electricity, gas etc, for public welfare operated by the government.

To control monopoly market: Few people manage to make a lot of money while they feel like a king and do whatever they want. State enterprise is established to stop such monopoly business. This kind of monopoly of business spoils the financial state of a country, and people have to suffer a lot for these reasons.

To develop monetary and banking systems: For the greater development of the economy, supervision is necessary on the part of the government. The central bank is especially trying to control money market and banking systems. Thus a control is established by the government for the development of monetary and banking systems.

To control export-import business: State enterprise helps to control the export-import business of a country, thus the industry also get balanced. Without control over the export-import, one country’s financial institutions can be spoiled. That’s why controlling export-import business is important for the state enterprise.

To help in national economic development: For developing our economy, private industries and gate enterprises are established. For these state enterprises, wealth doesn’t accumulate to some certain persons. State enterprise in to mobilize the capital for the productive purpose and economic situation is developed.

To create employment opportunity: Private industries play a crucial role in creating employment opportunity but that’s not enough to meet up the demand. That’s why to solve the employment problem state enterprises are established. Because state enterprise generates huge employment opportunity and tries to solve the unemployment problem in our country.

To help rapid industrialization: In underdeveloped and developing countries industrialization is hampered it necessary capital and entrepreneurs are not available. To make rapid industrialization government has established industries by own experiment.

To establish risky business: There are some industries which are needed but very risky. Private companies don’t come forward to invest in these types of industries. So government establishes this business and fulfills the demand of people of the country.

From the above discussion, we can say that state enterprises are established only for the public welfare which is the main objective of state enterprise. State enterprise has other objectives too, but it carrying on its business activities with a view to serving people not making money.