The
enterprises or companies owned and handled by the government are the public
sector enterprises. These may be held by the state or the central government.
Most of the times, the aim of such enterprises is the public welfare. They
participate and contribute in the economic activities to for the growth of the
country. Their second motive is to earn as much profit as they can from these
activities. Some of the biggest public sector enterprises in India are Indian
Oil Corporation (IOC), Hindustan Machine Tools Ltd. (HMT) and Life Insurance
Corporation of India (LIC). Although, not all these enterprises are the same
just because they come under the public sector. There are three forms of such
enterprises.
DEPARTMENTAL
UNDERTAKINGS
This is the
most ancient type of public sector enterprise. These are the departments
through which the government functions and their activities are the most
crucial part of it.
These types
of enterprises are suitable where the complete control of the government is
necessary with the supreme secrecy for all the information. Also, in these a
large of amount heavy investment is required and the economic control is
mandatory which can be only done by the government.
Some of the
advantages of these enterprises are that there is effective control over the
operations being executed since all the power lies within the hands of one
authority. Also, there is high degree of public answerability which means that
the public is aware of almost every step undertaken by them.
Although the
disadvantages of these enterprises are that there are no immediate decisions
made since for every action, a written permission must be received by the
concerned authorities which takes a long time. Also, because of this long
procedure, they can’t take the full advantage of the opportunities available to
them.
STATUTORY
CORPORATION
These are a
special type of enterprises which is brought into existence only by the
parliament. They decide the powers, rules, regulations, operations and
activities as well as its relationship with the government. These enterprises
require a large amount of capital investment and must be run as a business
along with keeping in mind about the public welfare. Some examples of such
enterprises are Air India, Indian Airlines, Reserve Bank of India (RBI) and
Industrial Development Bank of India (IDBI).
The merits
of such organizations are that they have a lot of flexibility since they do not
necessarily have government interference in their operations as well as
financial matters. Also, they are highly important for the economic development
since they have the power of government along with the features of a private
organization.
However,
some downsides are that since it has the responsibility to run as a business,
they may lose themselves into some anti-social actions such charging really
high prices from the public. Also, they do not usually have to face any
competition from anyone therefore, they might slack behind sometimes and turn
out to be inefficient.
GOVERNMENT
COMPANY
Any company
whose majority of the shares, that is at least 51%, are held by a state or the
central government then it is declared a government company according to the
Indian Companies Act, 2013. These types of companies suitable when the
government wants to control an organization in the private sector with the aim
of public welfare. Some examples of such companies in India are Bharat Heavy
Electrics Ltd. (BHEL), Steel Authority of India (SAIL) and Hindustan Aircrafts.
The main
merits of such organizations would be that there is no requirement of a written
permission by the parliament since it is formed under the Companies Act, 2013.
Also, they have complete power over the management of the company since there
is no government interference.
But they are
not answerable to the parliament since it is more of a private organization and
also the independence factor exists on the paper only. Therefore, the
politicians and ministers can interfere if they want to.
0 Comments