Q. Despite a significant rise in public investment( during five year plans), the GDP growth rate has continued to be rather slow. Comment.

Dear Student
Despite a significant rise in public investment during five year plans, the GDP growth rate has continued to be rather slow. 
The main reasons behind this were:
i)Public sector involves various shortcomings such as inefficient Management,corruption,Delayed Decisions, Lack of Innovations and some undertakings even had incurred huge losses.
ii)Public sector continued to monopolise in non essential areas,which could be handled well by private sector.For example-telecommunication,hotel industry and many others.Precious funds were channelised into these areas.
iii)The return on investment was also low.
iv) Under Utilization of Capacity was also a reason.Public enterprises faced the problems of underutilization of its installed capacity.Thus, the capital resources were not fully utilized by public enterprise.

The Overall performance was very disappointing and thus the GDP growth rate has continued to be rather slow.

Ragards

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