Discuss the Advantage and Disadvantage of State Control of Industries??

Certain industries are under state control in many countries. It plays an indispensible role for economic development of nations. The term state control means to govern industry in order to develop the economy and to provide better services and facilities for the public. In other words, state control refers to the industry owned by the state or government for national welfares rather than profit. Research has shown state control of industry as a controversial issue that has to be research. The well plan system with strict management may leads to development of industries.

It can be consider that, state control of industry provides services with minimum cost. The state act as a responsible body for citizen compared to privatization. Therefore, it is an essential for formulation of plan and policies to carry out state control industry smoothly for the benefit of nations. However, it can create monopolies that may have a direct impact on private sector which has also vital role for national progress . It is consider that private sector seems to be under the state control.

This essay will attempt to evaluate positive aspects and consequences of state control of industry by examining transport, bank, and telecom industry of various countries. State control of industry invest profitable amount in development of nations. The industry empower in development program such as scientific researches and social services. The UK government for instances, spends approximately 40% of GDP in public expenditure such as health, education, social protection, transport, industry and agriculture.

However, private sector is not concern for national investment. Thus, people offer a direct benefit from state control of industry. State control of industry brings significant growth of national economy and employment opportunity for public. The benefit of industry through production of product and services enhance to increases revenue that may have vital role for increasing national economy. For instances, Indian Railway was established in 1853 to provide transport facilities for public which is a state control industry in India.

Moreover, it has 9,000 passenger trains that transports 18 million passengers daily and receives revenue of $19. 13 billion annually. In addition, it provided job opportunity to more than 1. 4 million employees. It is the profitable state control industry in India and consider as the largest revenue provider. Similarly, JPMorgan Chase and Co. is a state control Bank of America which has made strong profit of $11. 7 billion in 2009 and provide employment to approximately 220,452(2009) peoples in 60 countries. Thus, state control of industry may become the source of income for many countries.

Firstly, state control of industry may be able to establish global business. This is because of global relation of nations that help in better management and promotion of business all over the world. Today, Thai international Airway for instance, introducing its business worldwide. It is a State owned industry of Thailand and awarded as The Best Airline in the world in 2006. Furthermore, it was founded in 1957 with nine international flights. Nevertheless, yet, Thai Airways seems to be the best airlines in the world with 71 domestic and international flight.

Similarly, in 2009, the airways earned huge profit of 2. 5 billion Baht and has been lunching its business in many countries. Hence, state control of industry can be able to invest large capital to spread its business globally. Secondly, state control of industries is mostly trustful as well as ensures public to compensate when the company suffers from immense loss. It is governed by state or government and is consider as the responsible body for citizens. Therefore, many people usually believe a government sector than a private sector.

Finally, it may provide better facilities for employees than private sectors in most of the country. It is widely believed that significant number of peoples give more emphasize on government service because of secure life after retirement. However, monopolies of state control of industry usually decrease competition in a market. The monopoly may exist when one industry cover more than 45% of a market. It is generally believed that low competition significantly increases the market price and a single party may supplies a product or a service.

In past, Telecom New Zealand for instances, covered almost market of New Zealand through its product especially phone line. Consequently, it usually dominate private sector to expand its business in a market. It is clear that private sector also plays a pivotal role for national economic growth. Thus, state control of industry may directly affect source of income of nations In contrast, state controls of industries are usually less efficient than private sectors.

This is because of poor management, corruption, inexperience human resources and lack of future plan of a state control of industry. Yet, in many countries state control industry seems to be in loss because of government policy that unable to make competition with private sector. For instances, in 1993 the privatization of British Rail during the period of Margaret Thatcher is an evidence which generally explore the condition of state owned industry in Great Britain. Thus, these might be the main factor for privatization in many nations.

In conclusion, this essay attempts to summarize and assess the benefit of state control of industry for both public and government. However, it consists of some limitation that has to be study seriously for solution. Today, it is observe that private sectors are usually making huge profit as compare to government sectors. Therefore, government has to examine above discussion carefully and should implement new strategy of management of industry. The empirical study showed that government should check the function of industry regularly in order to expand its business globally.

It is hope that government would bring radical improvement of state owned industry in near future. REFERENCES: Morrison J. The International Business Environment, Second Edition, pp 82-83 www. google. com: The Free Encyclopedia: Indian Railway, pp-1 www. google. com: The Free Encyclopedia: Thai International Airways pp-1-2 www. google. com: The Free Encyclopedia Telecom of New Zealand pp-1 www. google. com: The free Encyclopedia: JPMorgan Chase and Co. pp-1 www. google. com: The Free Encyclopedia: Privatization in UK pp-1.