Public and Global Enterprises

 

PUBLIC SECTOR ENTERPRISES :

Meaning :

The public sector consists of various organizations owned and managed by central or state or by both governments. The govt. participates in economics activity of the country through these enterprises.

FEATURES :

  1. Capital is contributed by central or state or both governments.
  2. Public welfare or service is the main objective.
  3. Management & control are in the hands of govt.
  4. It is accountable to the public

FORM OF PUBLIC ENTERPRISES :

Departmental Undertaking    Statutory Corporations    Government Companies

I. DEPARTMENT UNDERTAKING :

These are established as departments of the ministry and are financed, managed and controlled by either central govt. or state govt. Examples :- Indian Railways, Post & Telegraph

FEATURES :

  1. No Separate Entity :- It has no separate legal entity.
  2. Finance :- It is financed by annual budget allocation of the govt. and all its earnings go to govt. treasury.
  3. Accounting & Audit :- The govt. rules relating to audit & accounting are applicable to it.
  4. Staffing :- Its employees are govt. employees & are recruited & appointed as per govt. rules.
  5. Accountability :- These are accountable to the concerned ministry.

MERITS :

  1. It is more effective in achieving the objective laid down by government. as it is under the direct control of govt.
  2. It is a source of govt. income as its revenue goes to govt. treasury.
  3. It is accountable to parliament for all its actions which ensures proper utilization of funds.
  4. It is suitable for activities where secrecy and strict control is required like defence production.

DEMERITS :

  1. It suffers from interference from minister and top officials in their working.
  2. It lacks flexibility which is essential for smooth operation of business.
  3. It suffers from red tapism in day to day work.
  4. These organizations are usually insensitive to consumer needs and do not provide goods and adequate service to them.
  5. Such orgs. are managed by civil servants and govt. officials who may not have the necessary expertise and experience in management.

 

CBSE Business Studies Class XI ( By Mr. Kailash Gururani )
Email Id : [email protected]

Business Studies - Mr. Kailash Gururani

 

 

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