Introduction

A story that sets the stage

• Anita, a Class XI student, was flipping through the newspaper when a headline caught her eye: the government planned to disinvest its shares in a few companies. The next day brought another story — a public sector company was making heavy losses and there was talk of shutting it down. Right alongside, she read how some private sector companies were doing extremely well.
• Curious, Anita wanted to understand what terms like public sector, disinvestment and privatisation actually meant — and that curiosity is exactly what this chapter answers.

Every day you interact with many different kinds of business organisations, and they are not all owned in the same way. Looking closely at who owns them helps us group them into three broad categories.

• Privately owned organisations: In your local market you find shops run by a single sole proprietor, larger retail outlets run as a company, and professionals — lawyers, doctors — offering services either alone or with others as a partnership firm. All of these are owned by individuals or groups of individuals rather than by the government.
• Government owned organisations: Some businesses and services are owned and run by the government. Railways, for example, is wholly owned and managed by the government. The post office in your locality belongs to the Post and Telegraph Department of the Government of India — although reliance on postal services in cities and towns has fallen sharply because so many private courier firms now operate there.
• Global enterprises: A third kind of business operates in more than one country at the same time. These are called global enterprises.

The takeaway: all three kinds of organisation — public (government-owned), private (individually owned) and global (spread across countries) — are doing business in India side by side, just as Anita discovered from her own reading. This chapter studies each of them and how the government participates in the economy through public enterprises.