Give five reasons why Government participates in business enterprise.

Answer Details

Government takes part in business enterprise for the following reasons:

• To provide essential goods and services: utilities such as water, electricity and public transport that the citizens need but the private sector may neglect.
• To provide services too costly for private investors: projects requiring very heavy capital, such as railways, refineries and steel plants, are often beyond private means.
• To prevent exploitation by private monopolies: government provides some services itself to ensure fair prices and protect consumers.
• To create employment: public enterprises provide jobs and help reduce unemployment.
• To generate revenue: profitable state enterprises add to government income.

(Other valid reasons: to ensure even development across regions, and to control strategic industries important to national security.)