What is Joint Sector ?

Joint Sector refers to a form of partnership between the public sector (government) and the private sector (private enterprises) in the context of the economy. It is an extension of the concept of a mixed economy, where both public and private enterprises coexist and contribute to economic development. The idea of the joint sector was initially introduced by the Industrial Policy Resolution of 1956, which advocated government participation in the equity capital of private-sector enterprises. The primary objective was to promote a socially determined pattern of industrial growth and prevent the concentration of economic power in a few hands.

According to J.R.D. Tata, a prominent industrialist and business leader, a joint sector enterprise is intended to be a partnership between the private sector and the government. In such enterprises, the government’s participation in capital should not be less than 26 percent. The day-to-day management is generally entrusted to the private sector partners, while control and supervision are exercised by a board of directors with adequate government representation.

The Dutt Committee, also known as the Industrial Licensing Policy Inquiry Committee, in its report in 1969 recommended the creation of joint sector undertakings to curb private monopolies and to harness the benefits of large-scale industries while preventing the concentration of economic power in the private sector. The joint sector includes both new undertakings where the government holds at least 26 percent of the equity and existing private enterprises brought under joint sector management through the conversion of loans into equity by public financial institutions. This arrangement allows the government to participate in and influence the direction and control of these enterprises while still allowing the private sector to play a significant role in their day-to-day operations.