Public utilities are industries which supply services, clothed with “a public interest” such as water, gas and transport. These services are essential to the community. Therefore public utilities are subjected to some form of governmental control or restrictions.
(i) Public control
As already mentioned, some sort of control is necessary in case of public utilities. Therefore, many of the public utilities are municipalised, i.e. place under the control of local authorities. For example, electricity and water supply in Bombay are municipalised.
However, members on committees of such municipalities are often not technical persons or experts in the field. Therefore another form of public control has grown up i.e. the formation of public corporations.
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(ii) Privileges
Such industries are also given monopolies in the local area in which they operate. They are given special privileges and are free from the difficulties of competition. In the light of these privileges, it is necessary in the public interest to lay down certain rules which such industries must follow.
For example, services should be offered to all without discrimination. Supplies should be at a reasonable price and must be adequate. As there is no competition, selling is relatively easy and of a routine nature. Intermediaries such as wholesalers and retailers become unnecessary and been the advertising expenditure is low.
(iii) Difficulties
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The main difficulty faced by the public utilities is that they have invariable to start on larger scale instead of being able to grow gradually from a small unit into a larger one. Thus the initial capital investment is heavy. Besides, in the earlier years the returns may not prove adequate.
Co-operative Societies
The co-operative movement has become more popular in recent years in India, because of the impetus given by legislation which encourages co-operation in activities such as production, purchase, selling, etc.
A co-operative society is basically formed by class of persons who have a common interest. These persons club together their money with a view to get some benefit out of the society that has been formed.
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(i) Distributive or Consumer’ Society
For example, in the distributive or consumers’ cooperation, consumers combine so that they can buy in common taking advantage of the quantity discount that might be offered for such purchases. Products so purchased are ten sold to the members at prices which are lower than those prevailing in the outside market. By forming such society, the profits of the middlemen are eliminated, and the benefits passed on the members of the society. Housing societies are becoming increasingly popular in Indian.
The objective of such a society is to provide residential houses for its member. This is a special form of consumer society.
(ii) Credit Co-operation
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Co-operation is also extended in the field of credit. Members who have spare money can deposit in such a society so that it can be lent out to other members who are in need of money.
The co-operative movement has gained so much momentum in India that there are number of types of societies formed. They include industrial producers’ societies, urban credit societies, and diary and milk societies, cattle breeding societies, irrigation societies and banking societies.
(iii) Agricultural Co-operation
Co-operation is extended also in the field of agriculture by forming a farming society. The objective may be to promote better methods of cultivation and help one another in securing their requirements collectively at a lower instead of individually at a higher price.