Losses incurred by public sector enterprises are to be met out of the public budget. Do you agree with this statement? Discuss.
Dear student I agree that Losses incurred by public sector enterprises are to be met out of the public budget. This is because it is the main objective of budget to manage public sector enterprises as the budgetary policy of the government shows interest of the government to increase the rate of growth through public enterprises. Often, public sector enterprises are encouraged in areas of natural monopolies. (e.g., water lines, railways etc. where there are advantages if a single firm produces the good).Thus losses are also to be met out of the budget,if any. Regards