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Public Sector

Definition
Public Sector is that part of the economy concerned with the transactions of the government.

Public Corporations
Public Corporation is a separate legal form of organization in the Public Sector set up by an Act of Parliament to run the whole or most of an industry.

The main aim of public corporations is to provide efficient public services at a reasonable price. They do not aim to maximize profit.
There are two main forms of Public Corporations.
v  Those who provide a product to the public and charge for it directly.
v  Those who provide a product to the public and do not charge for it directly.


Features
v  It is set up by an Act of Parliament
v  It is run by a board appointed by a government minister
v  The general policy is laid down by the government
v  The day-to-day management is left to the board
v  The government sets financial targets for the Public Corporation in the parliament
v  It is a corporate body with a separate legal existence

Difference between Public Corporations and Limited Companies
Public Corporations
Limited Companies
v  It is owned by the government
v  It is financed by the government
v  It is aimed at providing public efficient services
v  It is regulated by an Act of Parliament
v It is run by a board appointed by a government minister
v  It is owned by shareholders
v It is financed by issuing shares and debentures
v  It is aimed at maximizing profits
v  It is regulated by the Companies Act
v  It is run by a board elected by shareholders


Municipal Enterprises
Some local authorities involve in running trading enterprises. They provide services such as local bus service. They are often subsidized from rates. 

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