Why was public sector given a leading role in industrial development during the planning period?


At the time of Independence, the public sector was a leading role in the industrial sector because the country’s condition was weak and poor. There were not sufficient resources and money available with common people that they could invest in, so the public sector had to invest. The following reasons can be considered for the leading role of industrial sector:

  1. Heavy investment: There was a heavy need for investment and it was not possible for the private sector to invest in industries and the risk involved with industries was high, so the private sector was not ready for the investment. Thus, the government had to invest and played a leading role during the planning period.

  2. Low Level of Demand: At the time of independence the majority of people had low income and were poor. Thus the demand was low, so it was risky for the private sector to invest in industries. The only way to increase the demand was public sector investment.

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