4. Profit and Development of the Social Sector

The investment to be made by the government in PSUs was in the nature of asset creation and these entities were to be involved in production activities. It was natural for the government to gain control over the profits and dividends accruing from them. The goods and services the PSUs produced and sold provided disposable income to the government. The government had a conscious policy of spending the income generated by the PSUs. They were to be used in the supply of the ‘social goods’ or what is called the ‘public goods’. And thus, India was to have a developed social sector. by social goods the government meant the universal supply of certain goods and services to the citizen. These included education, healthcare, nutrition, drinking water, social security, etc., in India. It means that the PSUs were also visioned as the revenue generators for the development of the social sector. Due to many reasons the PSUs would not be able to generate as much profit as was required for the healthy development of the social sector. This eventually hampered the availability of public goods in the country. In place of giving profits back to the government, a large number of the PSUs started incurring huge losses and required budgetary support at regularly.