Profit motive
Topic: Sectors of the Indian Economy · NCERT: Class 10, Ch 2 "Sectors of the Indian Economy"; Class 10, Ch 4 "Globalisation and the Indian Economy"
Meaning
The profit motive is the aim of earning profits. It guides the private sector, where individuals or companies own the assets and sell goods or services. Under the profit motive, a firm offers a service only if it pays. Users must pay for what they get. This is why some things are not supplied well by private firms alone, such as costly roads, cheap electricity for small units, or health care for the poor.
Example
Private companies such as TISCO and RIL run their businesses to earn profits. Indian Railways and the post office are public sector bodies. They are funded by taxes and serve people even where a private firm would not earn enough to operate.
Don't confuse with
- Public sector purpose: the government owns the assets and provides services mainly for public welfare, not just profit. One example is the government buying wheat and rice at a "fair price" and selling them cheaper through ration shops.