The public sector must not be just about profit

Why does the government find it so hard to understand that health and education are about so much more than profit margins?

see, http://www.theguardian.com/society/2011/may/12/public-sector-more-than-profits

NON-PROFIT PERFORMANCE INDICATORS IN THE PUBLIC SECTOR

http://onlinelibrary.wiley.com/doi/10.1111/j.1468-0408.1985.tb00244.x/abstract

As opposed to the public (government) sector and the for-profit (business) sector, the nonprofit sector (also referred to as nongovernmental, independent, philanthropic, or third sector) is often defined by what it is not (i.e., profit-making). The easiest way to understand the difference between the public, for-profit, and nonprofit sectors is to understand the constituents that each serves.

see, http://icc.ucdavis.edu/lab/business/Differences.htm

Public sector employees have been developed for a purpose to provide service as well as enforce the government regulations. To that extent they have a different set of work environment, loyalty and reasons to be part of Public sector enterprises. Though profit can be one part of motive, it cannot be the sole motive. Here are a few references that examines the public sector employees in different countries.

http://hp.gredeg.cnrs.fr/Pierre_Garrouste/Festre_Garrouste_2008_Motivations_incentives_Perf_PS_rev.pdf

The sole purposes of public sectors are to protect society from complications of life and backwardness or simply providing social welfare and planning and executing programs of social developments in a sustained manner. But in order to run these programs and sustain them, finance is one of the strongest components of the mobility engine  and because of that they have to be resourceful, creative and profitable. It is for a motive or a programs that they have to be profitable, not because profit is a motive or reason of their establishments. Profit in the contrary is the sole motive and guiding spirit behind the establishments of private companies. 

The public sector must not be just about profit

Why does the government find it so hard to understand that health and education are about so much more than profit margins?

see, http://www.theguardian.com/society/2011/may/12/public-sector-more-than-profits

NON-PROFIT PERFORMANCE INDICATORS IN THE PUBLIC SECTOR

http://onlinelibrary.wiley.com/doi/10.1111/j.1468-0408.1985.tb00244.x/abstract

As opposed to the public (government) sector and the for-profit (business) sector, the nonprofit sector (also referred to as nongovernmental, independent, philanthropic, or third sector) is often defined by what it is not (i.e., profit-making). The easiest way to understand the difference between the public, for-profit, and nonprofit sectors is to understand the constituents that each serves.

see, http://icc.ucdavis.edu/lab/business/Differences.htm

Dear @Sundarapandian, "the public sector must not be just about profit" - @Costas. I do very much agree! 

You do speak about Public Sector Enterprises! We should make some difference between services ( public transportation; roads, sewers and water systems; public universities) and production oriented PSE!

Regarding  Public Sector Enterprises (PSE), production oriented, it is assumed that such companies should not exist if they are without profit. In Serbia, few days ago, public invitation was announced for 502 companies, not only production but service oriented also! Please, have a look! 

http://www.priv.rs/public-invitation

Friends - I thank you for the views! Yes, I know that Public Sector Enterprises are not set with "profit motive" but for social causes and welfare motives. However, there is a view that financial support is given for initial set-up, infrastructure, starting grant but in the long run the public sector enterprises should be self-sustaining. In order for this, some public sector enterprises are also working to earn some profit.

Thank you!

With best wishes

Sundar

Any Enterprise which is for economic derivation needs to make Profit. Public enterprises cannot be excluded from it. The Lead time for the Organization to grow and mature to cross the BEP and achieve its sustenance is more for a Public enterprise. All enterprises can survive only when they start making profit other wise the money invested from the Coffers of the State Exchequer is drain.

This is a good question. Certainly not. Those companies in public sector that  provide monopoly  services like railways in South Asia must not make profit as the sole motive. It can be one of the motives, though. The idea of such enterprises is to provide service to the public at affordable prices to the common people;  that should be the main motive, and they can earn profit as well, if they think that the price chargeable is higher enough.

The Operating Efficiencies of Organization such as Railways when managed well, automatically proves profitable as their Overheads are waived off as depreciation (normal  thumb rule for Overheads depreciation is 15 years for long tern investments); Some investments of the British time is still existing while our budget outlay after independence is progressively covered and not very heavy due to cautious steps of  small scale modernizations except for the Bullet Train Proposed (currently) is the heavy outlay.

http://timesofindia.indiatimes.com/india/Harvard-Wharton-students-quiz-Lalu/articleshow/953089.cms

Nothing without profit. Have a look in a paragraph 9 of Decision for Public Enterprise for State Roads Management-Serbia  : "The Public Enterprise shall operate in compliance with market principles and the Law.

The profit of the Public Enterprise, determined in compliance with the legal regulations can be allocated to the increase of the initial capital, reserves or otherwise, in compliance with the Law and the present Decision.

A part of the profit shall be allocated to the Founder and paid to the account of Public Revenues."

http://www.putevi-srbije.rs/pdf/decision.pdf

Dear Debi, Krishnan & Ljubomir Jacić, I thank you for the illuminating views!

In some of the board meetings I attended for public sector enterprises, it was pointed out the organizations should be self-sustaining. If not big turnover or profit, at least the expenditure of the public sector companies should be met by the revenue. 

Thank you for the references - I shall read them carefully in the weekend.

With best wishes

Sundar

Unlike Private Enterprises which are completely aimed for economic gains; Public Sector Enterprises are aimed towards

Predominantly Profits are required to be generated to sustain and take care of the Operating cost which is highly affected bu the INFLATION and Depreciating money value.