Question

Choose the correct characteristic of private sector of the economy.

• A. Controlled by the government
• B. Individually controlled
• C. Work for public welfare
• D. Work for the poor

Hint:

Ask who owns the assets and what the purpose is. Government ownership and welfare aims belong to the public sector, so find the option that says neither.

Answer 1

The Correct Option is B

Concept:

• Three of the four options describe the public sector and only one describes the private sector, so the fastest method is to spot the odd one out.
• Control and purpose are the two tests to apply.

Step 1: Apply the test of control.
Option (A) says controlled by the government. That is the definition of the public sector, so it belongs to the other side of the division and is rejected.

Step 2: Apply the test of purpose.
Options (C) and (D) speak of working for public welfare and for the poor. A private firm has to cover its costs and earn a profit to survive, so welfare cannot be its guiding purpose. These belong to the public sector as well.

Step 3: Check the option left.
Individually controlled means the assets are owned and the services delivered by private individuals or companies. That is exactly what defines the private sector.

Step 4: Confirm with examples.
Tata Iron and Steel Company and Reliance Industries Limited are privately owned and run for profit, while Indian Railways and the post office are government owned and run for service.

Final Answer: (B) Individually controlled