Since the beginning of human civilization, different systems have been implemented to provide a sustainable life to humans.
The primary purpose of all those systems was to provide the necessary services to its people. Those services included military protection, healthcare, education, etc.
As time passed, separate organizations were established to handle these matters. People were appointed to resolve the issues and bring the necessary reforms.
As the population increased to millions and billions, different sectors were set up, like the public, private, organized sectors, etc.
All these sectors had certain benefits for their employees and rules and regulations to run these organizations. But a layperson mostly does not know the difference between them or why a specific sector exists.
- The public sector comprises government-owned and operated organizations that provide goods and services for the public benefit. In contrast, the organized sector comprises private and public enterprises that adhere to labor laws, regulations, and reporting standards.
- Public sector organizations are funded by tax revenue and focus on healthcare, education, and infrastructure. In contrast, organized sector entities can be privately or publicly owned and operate across various industries.
- Employees in the public sector enjoy job security and benefits, and organized sector workers also receive protection under labor laws, including minimum wages, pensions, and health insurance.
Public Sector vs Organized Sector
The difference between the public sector and the organized sector is that the public sector comprises organizations that the government controls.
While the organized sector comprises organizations registered with the government, it may be clinics, shops, factories, businesses, schools, hospitals, etc.
Some other differences between the public sector and the organized sector are given in the comparison table below:
|Parameter of Comparison||Public Sector||Organized Sector|
|Definition||Comprises of organizations owned by the government.||Comprises of organizations registered with the government.|
|Examples||Post offices, railways, and airports.||Schools, hospitals, factories.|
|Objective||Do not seek profits. Provide services to citizens.||Provide services to citizens—additional benefits for employees.|
|Rules imposed||Directly owned by the government, anyone imposes no special restrictions.||They are registered with the government, so special rules like the Minimum Wages Act are imposed.|
What is Public Sector?
Public Sector comprises all those organisations owned and controlled by the government. The main objective of public sector organizations is to provide services to citizens.
The services could be related to lifestyle, education, and everything that is needed to sustain a good life.
These organizations do not intend to generate profit from these services. Since their primary purpose is not to create large amounts of revenue but instead work for its citizens.
The public sector includes railways, airports, public schools, public hospitals, public libraries, public roads, bridges, etc.
Primarily, the public sector operates in industries like Oil and Gas, Electricity, Water, Agriculture, Finance, Defense, Education, etc. So how does the public sector generate revenue to continue providing these services? The Public sector gets funds through different methods.
Those methods include fees, taxes, and financial transfers from other governments like federal to provincial, etc.
Different countries worldwide may have other funding systems for their public sector. Generally, there are three levels of the public sector:
Federal, Regional, and Local. Public sector organizations do not have any strict rules imposed on them as they are operated directly by the government.
But if the government changes or bring about some unfavourable decision, then that can impact the working of this sector.
In some parts of the world, the public sector performs well and outgrows the private sector. While in some aspects, the personal or organised industry works better than the public sector.
So there is a trend that exists in every country. But their first and foremost objective is to provide services to their country’s citizens to improve their lives.
What is Organized Sector?
The organized Sector comprises all those organizations that are registered with the government.
These organizations have to follow some rules imposed on them as they are registered with the government. Some of the rules are:
- Minimum Wages Act
- Factories Act
- Shops Act
- Payment of Gratuity Act
These acts impose some fixed procedures and regulations on the organizations in this sector.
There are some benefits for employees working in the Organization Sector. Employees have fixed contracts, which means they have a surety of work for the required period.
They have regular salaries with fixed working hours and provisions like social security and set days for leaves like public holidays, sick leave, etc.
Some organizations can fire their employees without any prior notice. But in the organized sector, employees work under a fixed contract, so they cannot be terminated without prior notice.
Other than the security of employment, they are also given access to clean drinking water and safe working conditions.
Examples of the organized sector include factories, banks, and all units registered with the government. It can consist of schools and hospitals as well.
But all the rules and benefits discussed above are applied to them.
Main Differences Between Public Sector and Organized Sector
Some of the features that differentiate between the Public Sector and the Organized Sector are given below:
- Public Sector comprises all those organizations owned and controlled by the government, while the Organized Sector comprises all those organizations registered with the government.
- Public sectors include railways, airports, post offices, public schools, and hospitals. Examples of Organized Sectors include factories, banks, and enterprises.
- The main objective of the Public Sector is to provide services to citizens. The organizations do not seek profit, while Organized Sector provides services to citizens; they have additional employee benefits.
- The government controls Public Sector, so no special rules are imposed on the organizations. At the same time, Organized Sector has to follow some procedures and rules such as the Minimum Wages Act, Factories Act, etc.
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Chara Yadav holds MBA in Finance. Her goal is to simplify finance-related topics. She has worked in finance for about 25 years. She has held multiple finance and banking classes for business schools and communities. Read more at her bio page.