ADVANCED FINANCIAL MANAGEMENT

Presented By: Jinal Shah B- 42

Aspects Of Pricing Of Products and Services Of Public Sector Enterprises

 Industrial development of the country.

Less concerned with making profits.

Leverage to the Government to intervene in the economy directly or indirectly

Achieve the desired socio-economic objectives and maximize long-term goals.

Rural development by providing basic infrastructural services to citizens.

Pricing Of PSES
Most important elements of a commercial enterprise. Companys positioning, profitability and the market share.

Pricing strategy, involves estimation of cost, analysis of competitors price, determination of demand and finally selection of the appropriate price.

Central Public Sector Enterprises (CPSEs) in India are charging prices below average/marginal cost Government has been subsidizing these prices in the interest of consumers. CPSEs, in the (crude) oil sector : an important vehicle of Government

The government fix/administer the price of goods and services based on the following principles: True costs (fixed and variable cost) of goods and services plus a reasonable return on investment Cross-subsidization between one group and another or between one sector and another Differential price norm for peak and off-peak demand

 Below cost to stimulate demand under conditions of excess/unutilized capacity Lower price for giving incentive to encourage consumption (e.g. fertilizer consumption) Higher price as disincentive to discourage consumption (e.g. petroleum products) Different prices/multi-tariffs to include discounts on purchases of larger volumes.

 Prices of goods and services produced by public sector enterprises in India, for long, have been determined by the Government The policy regime of controlled prices, or following the Administered Price Mechanism (APM).

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