20. Give a few examples of public sector activities and explain why the government has taken them up. -SST 10th

20. Give a few examples of public sector activities and explain why the government has taken them up. -SST 10th
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2 Answers

Answer :

 The public sector activities are set for the betterment of the public itself. The reason the government has taken up the public sector is so that proper facilities can be provided to the people of the country. Banks, transport, irrigation, electricity, water and all the basic things that are necessary for people, come under the public sector. Providing these facilities to its citizens is the responsibility of the Government.  
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Answer :

Example of credit as an asset: During the festival season, a shoe manufacturer has received an - order of making shoes in bulk, within a month’s time. To complete production, he hired some extra workers and has to purchase the raw materials. He asks the supplier to supply leather now and promises to pay him later. Then he took some advance payment from the trader. By
Economics: Understanding Economic Developmental
the end of the month, he is able to deliver the order, make a good profit and repay the money he had borrowed.

Example of credit as debt trap: A farmer picks up the loan from a moneylender to meet the expenses of cultivation. But unfortunately the crop is hit by the pests and fails. So, he is unable to repay the loan and debt grows larger with interest. Next year, he picks up a fresh loan and is able to have a normal crop that year. But earnings are not enough to pay the earlier debt. So, he is caught in a debt trap. He can repay the loan, only after selling a part of the land.
In shoemaker’s case, credit plays a vital and positive role, whereas in farmer’s case credit pushes the borrower into a situation from which recovery is very painful.
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