Introduction
Public enterprises play a vital role in the development and functioning of an economy, especially in developing countries like India. They are business organizations owned and operated by the government to provide goods and services to the public while also fulfilling broader social and economic goals. These enterprises can take various forms depending on their objectives, size, and the nature of operations.
Main Body
Forms of Organisation in Public Enterprises
There are three primary forms of public enterprise organization:
1. Departmental Undertakings
These are the oldest and most traditional form of public enterprises. They function as part of a government department and are controlled directly by a ministry.
Features:
- They are managed by government officials and are part of the administrative structure.
- Their budget and revenue are included in the government’s annual budget.
- Employees are considered government employees.
- They follow strict government rules and procedures.
- Examples include Indian Railways and the Postal Department.
2. Public Corporations (Statutory Corporations)
These are set up by a special act of the Parliament or State Legislature. They have legal identity, separate from the government, but are wholly owned by the state.
Features:
- They enjoy operational autonomy and are not subject to government departmental rules.
- They have their own board of directors appointed by the government.
- They can sue or be sued in their own name.
- They follow commercial principles and aim for efficiency and profitability.
- Examples include LIC (Life Insurance Corporation of India), ONGC (Oil and Natural Gas Corporation).
3. Government Companies
These are companies registered under the Indian Companies Act, 2013, and where at least 51% of the paid-up share capital is held by the government.
Features:
- They are managed like private companies with a board of directors.
- They enjoy greater flexibility in decision-making and operations.
- They are subject to audit by the Comptroller and Auditor General (CAG) of India.
- They can enter into contracts, own property, and sue or be sued.
- Examples include Bharat Heavy Electricals Limited (BHEL), Steel Authority of India Limited (SAIL).
Conclusion
Public enterprises take different organizational forms depending on their purpose, scale, and strategic importance. While departmental undertakings offer direct government control, public corporations and government companies offer greater operational flexibility. Each form has its own set of features, benefits, and limitations, but together they contribute significantly to the country’s industrial, social, and economic development.