The public sector company cannot easily compete with the private sector in terms of profit and efficiency due to the following reasons:

a. The main aim of a public sector is to work for the Welfare of its citizens. On the other hand, the main aim of a private-sector enterprise is to earn maximum profit.

b. The public sector provides many facilities free of cost or at a very low cost to the weaker section of the society. A government school does not generate enough profit as compared to a private school. Private Enterprise cannot provide these facilities free of cost to the citizens.

c. The public sector invests in those industries which require a huge capital investment and a long gestation period. The private sector is not very keen on this area.

d. In terms of efficiency, the public sector has to follow a specified protocol. This leads to delay in decision making. The private sector supersedes in efficiency in this matter.

e. The workers of the public sector are involved in red-tapism and bureaucracy.