ABSTRACT
It has been quite common for critics to look at the finances of public enterprises and be content with treating them as a reflection of their efficiency or otherwise. Occasionally these have been used as an argument in support of public enterprise or against it. But the kind of implications they have for the public exchequer has not received the wide appreciation that it merits. An investment in a public enterprise ordinarily is supported by a public borrowing, the more so when budget surpluses are exceptional and the magnitude of investments is large. Both these circumstances are relevant to India as well as many other developing countries. As the needs of current expenditures expand, and those of developmental expenditures as well, it would be a fruitful strategy to raise resources "equitably" under both categories. Or else, as the non-tax receipts of which incomes from public enterprises are a part, remain static or expand rather nominally.
