1 Relative safety: Not to suggest private sector banks are not safe but banking itself is a risky business and the collapse of private banks is more prevalent than we think. Having the Indian government’s backing, public sector banks are almost unlikely to break down.

2 Accessibility: Public sector banks have an enormous network of branches, especially even in distant rural and semi-urban locations. Most of the private sector banks have a limited number of branches, which are mostly concentrated in the Metro and Urban regions.

3 Affordability: The requirements like minimum balance etc are comparatively less in public sector banks and it must be far easier for people from lower and middle-income people to open and maintain their accounts in public sector banks than in private sector banks, where these necessities are more rigid and costlier. Most of the fees and service charges of public sector banks are also relatively less than private sector banks.

4 Employee Benefits

When considering a job, it is often best to note the overall package rather than just the provided salary. And while public sector salaries can be lower than those in the private sector, public sector employees often enjoy a greater and better deal.

In the public sector, employees can enjoy benefits such as better working hours, medical covers, and retirement benefits. The sector also provides employment awards and allows overtime to be accrued and paid back in flexible leave. This allows employees to create a good

5 Aiding the Community

Public sector organisations are made to provide services to the public, which is opposite to the private sector whose goals are focused on generating profit.

The community, as well as individuals, greatly benefit when these public services are done quickly and effectively. By focusing on providing aid for the community, one can feel a greater sense of purpose in the

• CAN MAKE A DIFFERENCE IN YOUR COMMUNITY

When public services are done right, they can make a real impact on individuals and communities. These types of public roles are well suited for people who are motivated to make positive changes to benefit those around them.

• IMPROVED WORK/LIFE BALANCE

Generally, the public sector is more reasonable than the private industry due to employment awards and agreements that preserve shorter working hours. Overtime can also be accrued and paid back in flexible leave.

Major Disadvantages:

Customer Service: The services in public sector banks are relatively slow and somewhat inefficient (partly because the employees have to deal with a larger number of customers and under limited logistical support) than in private sector banks. Due to strong unionisation and assured job security, staff of public sector banks are likely to be more lethargic, unresponsive and sometimes even discourteous to customers compared to their counterparts in the private sector. (This point is mostly valid only in Metro and Urban branches. Otoh, one can get more personalized and friendly service from the staff at the rural and small-town branches of public sector banks.

Slow Decision making: The processing of loan applications are likely to take an inordinately long time and be bogged down by interminable procedural bottlenecks in public sector banks whereas these processes are much faster and more efficient in private sector banks.

There is a common misconception that public sector banks lag behind private sector banks in adopting the latest technological advances. Now there is no difference in this respect between public and private sectors, though the employees of public sector banks may be a tad less tech perceptive than their private sector counterparts.

Now if one can just flip the above points, that will give the advantages and disadvantages of private sector banks.

To sum up, if you belong to the high-income upper middle class and reside in metro or urban areas, private sector banks are for you. On the other hand, if you belong to lower or middle-income groups and live in villages or small towns, public sector banks must suit you better.

The post Learning about the private sector- advantages, disadvantages. appeared first on The CEO Views.

As witnessed by several verifiable studies referred to earlier in this contribution, the crowding out generated by the competition of the public sector can be more than 100%. This means that the number of jobs lost by the private sector can be more than the number of jobs created by the public sector. This occurs when wages in the public sector are so attractive and the probability of finding a job is sufficiently high, that unemployed workers prefer to wait longer to find a public sector job. Moreover, when wages in the public sector show more stringent concerning fluctuations in productivity, the crowding-out effect becomes stronger when productivity is lower, which in turn amplifies the effect of real business cycles on unemployment. The elaboration or destabilizing, the role of the public sector is stronger the higher the wage gap is in favour of the public sector and the larger its size.

A number of channels can be responsible for crowding out. Crowding out of the product market can affect the derived labour possibly via higher taxes, higher interest rates, and competition from state-owned enterprises. It can also occur through the labor market, where higher wages, more job security, or a higher probability of finding a public-sector job can make an individual more likely to seek or wait for public-sector employment rather than search for or accept a job in the private. Finally, it can occur in the education market, where individuals seek qualifications appropriate for entering the public sector rather than skills needed for productive employment in the private sector.

Furthermore, there is evidence that a large government share in economic activity can be negative for long-term growth because of the distortionary effects of taxation, inefficient government spending due in part to rent-seeking or lower worker productivity, and the crowding out of the private investment.6 As a result, it’s questionable whether partial crowding out—a fall in both unemployment and private-sector employment— would be worth the potential long-term growth impacts. Many would agree that a net rise in unemployment would be a bad outcome of government hiring crowding in would be a good outcome of government hiring. From a public policy point of view, it can be argued yet that a private-sector job is much more desirable than a public-sector job. Because no change in unemployment implies that the government resources could have been allocated elsewhere.

A similar destabilizing role can also be generated when the public sector pays homogeneous wages across regions that have different productivity levels. One study finds that about half of the unemployment gap between the south and the north of Italy can be explained by the role of the public sector. Were public sector wages in line with those of the private sector, that is, paid according to local productivity, the unemployment gap would be half of what it has been historically. The same study shows that the rigidity of wage setting in the public sector clearly explains the differences in performance of the labour markets in the south and the north following the great bankruptcy of 2007/2008, with the southern market losing many more jobs than the northern market.

The post Crowding out and the destabilizing role of public sector employment appeared first on The CEO Views.

Multiple integrated legacy systems have traditionally characterized the public sector. Creating room for error, often the workers working in the public sector still carry out the process of exchanging information between themselves manually for the completion of a process or for providing a service, which also increases the costs including errors. Improving the speed and efficiency of services in the public sector is expected by the citizens and businesses to become more proactive and data-driven as the public and private sectors embrace data and automation with slick precision. A declining majority of employees thanks to demographic change along with increasing work pressure due to new legislation and the demands of citizens as it’s inevitable that the public sector automates.

The expectations of the self-services via seamless digital channels have only increased and accelerated since the pandemic.

Work in progress

 There is a great response from many public sector organizations to the process of responding to the rapid digitization of services and new regulations. There are many such examples like the example of a particular state pension service in Europe.  Resulting of a rising demand for services we can see that currently, its workforce isn’t expanding, whereas, the state’s population is growing and ageing. With the best digital tools, the future workforce demands more flexible, virtual work, When the pandemic reinforced the need for radical technological transformation, it was actually the business, not IT, which took the lead in championing the need for greater automation meanwhile. One simple bot was able to deliver work equivalent to 20 full-time employees, within a few weeks, Meanwhile, focusing on complex work and interaction with citizens is carried out by humans.

Key Challenges

Securing the support of the whole organization is the first challenge on the journey to automation especially if it doesn’t have a Chief Digital Officer, or Chief Data Officer, to drive the digital agenda. Then the desire to avoid vendor lock-in often leads to a reliance on custom solutions that increase silos and fragmentation. Making it difficult to apply AI Next, data quality and accessibility can be challenging as well. The regulatory and compliance context often means that personal data can only be used for the purpose it was gathered for. Along with other things, leaders need to ensure their activities serve a coordinated strategy across the public sector too.

Where to start?

As evolution in citizen-centricity, your journey should focus on transformation. Firstly, starting with the vision and advantages that will be the basis of the business case: How will automation add value for citizens and rise up your efficiency? Secondly, understanding the ecosystem of the technology which is available, workforce and data. How do the processes work today? Are they documented? Are there gaps in terms of speed and availability? Can you identify backlogs or bottlenecks? Thirdly, recognise the key and important challenges and a point of view from a citizen and business, and develop a strategy and roadmap for a deal with them – you’ll need to optimize the opportunities by identifying the processes, people, and technologies.

The post Why the future of the public sector is increasingly automated? appeared first on The CEO Views.

The main source of competition between the private and public sectors is the connected wage rate. The rules adopted by the public sector to determine the compensation of public employees are crucial in deciding the overall effects of public employment. When the wage gap in favour of public employees is relatively small and wages react to productivity quickly enough, the public sector generates only “mild” competition and the crowding out effects are small.

The study also takes into account the equilibrium or balancing, effect between the private and public sectors, as a result of the resources collected from the private sector directly supporting the additional expenses of the public sector. A large public sector drains more resources, in the form of taxes, from private sector households which, as a result, have less disposable income. This leads households to supply more labour and to accept a lower wage for a job, which in turn leads to reduced volatility and lower wages, as well as a positive effect of public sector employment on the private sector. However, higher wage gaps between public and private sectors, and rigid wages, in particular, can reverse the effect of a bigger public sector on private sector employment.

It is important to note that this “equilibrium effect” holds only for as long as the resources collected through taxes are collected predominantly within the same market as where the effect is measured. This is the case for the US, for instance, where most of the public sector employment is state or city employment, and the corresponding taxes are collected within those jurisdictions. For other countries, especially in Europe, taxes are generally collected at the national level, even when public employees are not evenly distributed across the country. In this case, in addition to higher public employment, the result can be a redistribution of resources, which may then lead to a different type of equilibrium that includes higher wages for the private sector. For example, one study shows that higher local public sector employment leads to higher wages in the UK and, at the same time, to a higher demand for goods and services produced by the non-tradable sector. Another study shows that the uniform tax system in Italy exacerbates the crowding-out effects of public employment in the weaker regional area of Italy.

The post The potential stabilizing role of public employment and taxes appeared first on The CEO Views.