Public Sector Enterprise

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Departmental Undertakings

  • Oldest among the public enterprises.

  • Organized, managed and financed by the Government.

  • Controlled by a specific department of the government.

  • Each such department headed by a minister.

  • Important decisions taken by the controlling ministry.

  • Parliament lays down the general policy for such undertakings.

Features of Departmental Undertakings

Features of Departmental Undertakings

Features of Departmental Undertakings

Features of Departmental Undertakings

Merits of Departmental Undertakings

Fulfillment of social objectives:

  • Fulfill its social and economic objectives.

    For example: opening of post offices in far off places, broadcasting and telecasting programmes

  • Lead to the social, economic and intellectual development of the people.

Responsibility to the public:

  • The concerned minister has to satisfy the public with his replies.

  • As such they cannot take any step.

  • These undertakings are responsible to the public through the parliament.

Control over Economic Activities:

Helps the government to exercise control over the specialized economic activities.

Contribution to Government Revenue:

  • Surplus of the departmental undertakings belong to the government.

  • Leads to increase in government income.

  • If there is deficiency, it is to be met by the government.

Little Scope for Misuse of Funds:

  • Subject to budgetary accounting and audit control.

  • Possibilities of misuse of their funds is considerably reduced.

Limitations of Departmental Undertakings

  • The Influence of Bureaucracy: On account of government control it suffers from all the ills of bureaucratic functioning.

  • Excessive Parliamentary Control: On account of the Parliamentary control difficulties come in the way of day-to-day administration

  • Lack of Professional Expertise: Not managed in a professional manner and suffer from deficiency leading to unnecessary drainage of public funds

  • Lack of Flexibility: In that lack flexibility because its policies cannot be changed instantly.

  • Inefficient Functioning: Such organisations suffer from inefficiency because of incompetent staff and lack of adequate incentives to improve efficiency of the employees.

Merits and Limitations of Departmental Undertaings

Merits and Limitations of Departmental Undertaings

Merits and Limitations of Departmental Undertaings

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