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Key Differences

Know the Differences & Comparisons

Difference Between Public Sector and Private Sector

public vs private sectorGone are the days, when only the Public Sector was prevalent in the economy. At present, many countries have adopted the policy of Privatisation, through which Private Sector is also gaining importance. For the progress and development of any country, both the sectors must go hand in hand as only one sector cannot lead the country in the path of success. The private sector comprises of business which is owned, managed and controlled by individuals.

On the contrary, public sector comprises of various business enterprises owned and managed by Government. Such organizations are either fully or partly owned by the center or state and come under the separate ministry. Some of the public sector organizations are set up by a special act of Parliament.

A cut-throat competition between both the sectors, to prove itself better over the other sector. So, the article attempts to outline the differences between public sector and the private sector in tabular form.

Content: Public Sector Vs Private Sector

  1. Comparison Chart
  2. Definition
  3. Key Differences
  4. Conclusion

Comparison Chart

Basis for ComparisonPublic SectorPrivate Sector
MeaningThe section of a nation's economy, which is under the control of government, whether it is central, state or local, is known as the Public Sector.The section of a nation's economy, which owned and controlled by private individuals or companies is known as Private Sector.
Basic objectiveTo serve the citizens of the country.Earning Profit
Raises money fromPublic Revenue like tax, duty, penalty etc.Issuing shares and debentures or by taking loan
AreasPolice, Army, Mining, Health, Manufacturing, Electricity, Education, Transport, Telecommunication, Agriculture, Banking, Insurance, etc.Finance, Information Technology, Mining, Transport, Education, Telecommunication, Manufacturing, Banking, Construction, Pharmaceuticals etc.
Benefits of workingJob security, Retirement benefits, Allowances, Perquisites etc.Good salary package, Competitive environment, Incentives etc.
Basis of PromotionSeniorityMerit
Job StabilityYesNo

Definition of Public Sector

The sector, which is engaged in the activities of providing government goods and services to the general public is Public Sector. The enterprises, agencies, and bodies are fully owned, controlled and run by the Government whether it is central government, statement government or a local government.

Public Sector Organizations

Public Sector Organizations

There are two types of public sector organizations, i.e. either the Government fully finances them through the revenues they raise by collecting taxes, duties, fees, etc. or the government holds more than 51% of the total share capital of the company which comes under various ministries. The enterprises are established with service motive. It is the largest sector, which works for the upliftment of the people by providing the following services to the people:

  • Generation of employment opportunities
  • Postal services
  • Providing education and health facilities at low cost
  • Providing security
  • Railway service

Definition of Private Sector

The segment of a national economy that is owned, controlled and managed by private individuals or enterprises is known as Private Sector. The private sector companies are divided on the basis of sizes like small & medium enterprises and large enterprises which are either privately or publicly traded organizations. They can be created in two ways, i.e. either by the formation of a new enterprise or by the privatization of any Public Sector Enterprise.

Private Sector Organizations

Private Sector Organizations

Business entities of the private sector are generally established with the sole objective of making profit and building brand reputation. They provide quality services to the community to win the trust and goodwill from people to survive in the long run and compete with the enemies. These enterprises also have to follow the government law and order. It is the largest sector in terms of employees.

Although in private sector performance is the basic criterion for job stability, i.e. if you perform well you will get promoted and if you won’t, you will be terminated. The major services provided by the Private sector are as under:

  • Quality education
  • Telecommunication services
  • IT services
  • Courier Services
  • Infrastructure development

Key Differences Between Public Sector and Private Sector

The following are the major differences between public sector and private sector:

  1. Public Sector is a part of the country’s economy where the control and maintenance are in the hands of Government. If we talk about Private Sector, it is owned and managed by the private individuals and corporations.
  2. The aim of the public sector is to serve people, but private sector enterprises are established with the profit motive.
  3. In the public sector, the government has full control over the organisations. Conversely, Private Sector companies enjoy less government interference.
  4. The employees of the public sector have the security of the job along with that they are given the benefits of allowances, perquisites, and retirement like gratuity, pension, superannuation fund, etc. which are absent in the case of the private sector.
  5. In the private sector working environment is quite competitive which is missing in the public sector because they are not established to meet commercial objectives.
  6. In general Public Sector uses Seniority for promoting employees, however, merit cum seniority is also taken as a base for promoting employees. Unlike Private Sector, where performance is everything, and so merit is considered as a parameter to promote them

Conclusion

Nowadays, Private Sector is progressing faster because promotes quality, not quantity; it encourages talent. Public Sector is full of reservations like reservations for minority section, females, a person with a disability and much more, here nobody sees talent, it is completely ignored and because of this, competent youths remain unemployed.

Public sector enterprises give so many facilities to their employees, which makes them satisfied that their job is secured, due to which, all the people are running after it like it is a marathon. However in the Private Sector, your job is never secured, even if you give years to it, you can be fired anytime just because of a single mistake.

Again in the private sector, where performance is king, the workload is much, but it keeps you active, this is missing in the public sector due to which the work sometimes becomes monotonous which creates boredom. One thing is really good in Private Sector i.e. it is corruption free. In Public Sector, you have to pay lots of money to the government officers even for a simple work, for no reason. It is an unending debate, both are good at their places, if the drawbacks are removed, they will surely prove good for the economy.

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Comments

  1. dada says

    August 9, 2016 at 5:20 pm

    Great article, I learned so much from this!

    Reply
  2. aashis says

    November 5, 2016 at 12:49 pm

    really satisfying…..finally ended my curiosity…thanks

    Reply
  3. Linda says

    December 9, 2016 at 9:54 pm

    Great content. I was able to gain a lot of knowledge about both sectors. Keep up the good work!

    Reply
  4. aziyizy says

    May 2, 2017 at 8:58 am

    Thanks mam

    Reply
  5. AV says

    June 23, 2017 at 2:37 pm

    Thank you keep it up. It is very usefull..

    Reply
    • Surbhi S says

      June 24, 2017 at 9:44 am

      Thank you all the readers, for appreciating our article. 🙂

      Reply
      • Hauwa says

        October 13, 2019 at 5:00 pm

        Learning they said, is a continues process. Today, I have gained a lot I can stand on my feet to challenge anyone on the differences between public and private sector anytime anywhere .remain blessed

        Reply
  6. Sumona says

    July 12, 2017 at 11:10 am

    Learned a lot… thank you it was simple & easy to understand.

    Reply
  7. Linda says

    September 24, 2017 at 6:20 pm

    Thank you.

    Reply
  8. Linda says

    October 16, 2017 at 5:57 pm

    Is it possible to give me your full name so that I can cite this properly? Thank you

    Reply
    • Renatha Renatus says

      January 9, 2022 at 1:28 pm

      Good and its very useful

      Reply
  9. Ester says

    April 17, 2018 at 5:46 pm

    Thank you very much for explains this in details. very clear and understandable.

    Reply
  10. Abdul Malik khan says

    May 6, 2018 at 12:30 pm

    It is very useful. I am satisfied very clear and understandable.

    Reply
  11. Surbhi S says

    May 11, 2018 at 3:06 pm

    Thank you so much, for constantly sharing your views to us. Keep reading 🙂

    Reply
    • Lona says

      February 21, 2024 at 4:07 pm

      can you tell me the author please, I’m writing an assignment 🙏🙏❤

      Reply
      • Surbhi S says

        February 28, 2024 at 5:10 pm

        The author’s name is Surbhi S.

        Reply
  12. Mynameiskrish says

    May 19, 2018 at 7:24 pm

    Very nice…

    Reply
  13. Aumprkash says

    July 18, 2018 at 3:50 pm

    Nice collection and useful specific content……. thanks for assisting me and many to understand the topic.

    Reply
  14. Jatin says

    February 2, 2019 at 3:36 pm

    Thanks i got the matter what i want.

    Reply
  15. Prafull Gawande says

    February 4, 2019 at 9:07 am

    Very helpful information
    Thank you😘😘😘

    Reply
  16. Candy says

    February 7, 2019 at 6:28 am

    This was amazing. The content was very informative with little repetition. Thank you so much !

    Reply
  17. Siman Yilkang says

    February 13, 2019 at 8:55 pm

    Quite efficient and helpful. You are doing a good job there.

    Reply
  18. lusoon says

    February 18, 2019 at 6:38 pm

    thank you , keep it up. it is very useful

    Reply
  19. Ruben says

    May 25, 2019 at 11:07 am

    Very informative article.Thank You
    Keep up the good work

    Reply
  20. Wilmot N. Daniel says

    September 24, 2019 at 2:41 am

    Thanks so much for the information I really do learn a lot from this.

    Keep it up.

    Reply
  21. Stanslousmutila says

    April 14, 2020 at 4:49 am

    After being stuck on my assignment about the topic, I finally got what I wanted and I can say that it is clearly presented and I can write a good paper about the topic.

    Thanks.

    Reply
  22. Nick Trex says

    June 28, 2020 at 1:47 pm

    Thanks for the information…

    Reply
  23. Anil kumar Gupta says

    July 28, 2020 at 4:24 pm

    thanks it really helps students like us to understand the concept

    Reply
  24. Nahida Dilkash says

    January 22, 2021 at 5:25 pm

    I am satisfied,this explanation is very useful for me…..
    Thank you.

    Reply
  25. Paula says

    March 19, 2021 at 3:07 pm

    Thank you so much, very helpful I only wish we had references.

    Reply
  26. ABRAHAM MANGETH says

    April 11, 2021 at 1:54 pm

    Much Thanks for the good explanation between public sector accounting and accounting in the private sector I’m very satisfied for the explanation

    Reply
  27. Chima says

    April 24, 2021 at 3:16 pm

    It’s really good to know about informations like this.
    I’m really happy

    Reply
  28. Jacques Mbiya Mbuyi says

    July 9, 2021 at 8:40 pm

    you are the best.
    I have learned much from your resources.

    Reply
  29. kabiru mainasara says

    August 8, 2021 at 10:12 pm

    very appreciative thanks so much with your available resources

    Reply
  30. Olasunkanmi Sekinat Temilade says

    August 27, 2021 at 9:36 am

    Waoooo so thoughtful of you
    I really enjoy this work it explained all what I need to know about public sector and private sector.

    More knowledge

    Thanks so much

    Reply
  31. Best Job Site in India says

    October 9, 2021 at 8:12 pm

    Thanks for your post

    Reply
  32. Anniel Khwele says

    July 14, 2022 at 2:33 pm

    Really informative and strait to the point and concise without it being complicated.
    I am looking forward to see how you can differentiate them specifically on their management of the two sectors .

    Reply
  33. Naresh says

    September 17, 2022 at 1:05 pm

    Nice article, I really like this post.

    Reply
  34. Ogbulagya, Obori Ahmed says

    October 28, 2022 at 2:11 pm

    A very nice article, comprehensive submissios.

    Reply
  35. Felicity Aimola says

    October 29, 2022 at 12:57 pm

    This is really interesting, thank you so very much. More grace men.

    Reply

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