What are the problems of public enterprises?

The problems of public enterprises.

Public enterprises suffer from a great deal of problems. These problems faced by the state enterprises are:

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Choice of the form of organisation: The success of an organisation largely depend on the choice of an organisation. Before selecting the form of organisation, its nature, capital requirement, requirement of managers and the state policy should be considered.


Autonomy: In theory, it has been believed that state enterprises have attained managerial autonomy. But in practice, the estimates committee has suggested that these organisations are subject to government interference and control. maximum government interference has affected efficiency of the organisation.

Internal administration: Lack of adequate trained personnel put a lot of difficulties on the administration of public enterprises. The managing directors are senior personnel of the government who do not have adequate technical knowledge on the management of public enterprises.

Price policy: The pricing policy of the state enterprises is another problem of these organisations. A sound pricing policy should him at earning some profit so that the enterprises will be economically viable units. The pricing policy should be such that it will cover the cost and meet the financial requirement for development plans.

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