question_answer

Public sector has a concern for social welfare and private sector has an advantage of innovation and efficiency. Private sector is crazy for profit and public sector is lacking efficiency. In this situation, it is really a problem which form of organization is suitable.

(a) Is there any form of organization which combines benefits of both? Identify and name it.

(b) Give two merits of this type of organization

(c) Give two demerits of this type of organization.

Answer:

Ans.     (a) Yes, Public Private Partnership

(b) Merits:

(i) PPP attracts private investment which is of utmost importance to undertake such essential projects. Involvement of private sector will bring efficiency in implementation of projects and cut down cost and time.

(ii)It helps in bringing innovative design and constructive practices. Involvement of experienced and creditworthy sponsors and commercial lenders can increase economic viability of the projects.

(c) Demerits:

(i) Cost of production increases for the government as private sector also demands its profit share for the money it invests.

(ii) Control gets divided between private and public sector. Government remains involved in all stages and private sector is responsible for more commercial functions like project design, construction, finance and operations.