PUBLIC, PRIVATE AND GLOBAL ENTERPRISES.

-> Private Sector And Public Sector
1. Departmental undertakings.
2. Government accounting and auditing.
3. Government companies.

Departmental Undertaking —> Features:

1. Direct funding from the government.
3. Service conditions.
4.Control of ministry.
5. Accountability to the ministry.
—> Merits:
1. Effective control of Parliament. 2.Public accountability.
3. Revenue is a source of income for government. 4.National security.
-> Limitations:
1. Lack of flexibility. 2.Delay in decision making
3. Bureaucracy hinders benefits of business opportunities.
4. Red tapism. 5.Political interference.
6. Consumer needs ignored.

Statutory Corporations —> Features:

1. Established/formed by an act Parliament. 2.Owned by the government.
3. Corporate body/structure. 4.Independently financed
5. Independence from government accounting. 6.Own service conditions.
—> Merits:
1. Operational flexibility. 2.Non-interference by government.
3. Autonomous organisation. 4.Valuable instrument for economic growth.
—> Limitations:
1. Flexibility on papers only.
2.Government interference.
3. Corruption. 4.Delays in action.

Government Company —> Features:

1. Created by the Companies Act.
2. File a suit.
3. Enter into contract.
4. Management regulated by the Companies Act.
5. Rules contained in memorandum and articles of association.
6. Audit by Central Government.
7. Government and private funding.
—> Merits:
1. Ease of formation.
2. Independent status.
3. Autonomy.
4. Good market control.
—> Limitations
1. Provisions of Companies Act not relevant.
2. Evades constitutional responsibility.
3. Main purpose defeated.

Know the Terms—

-> Mixed Economic system: The economic system in which there is blending of both private and public sector.
-> Private Sector Enterprises : All those enterprises which are owned and managed by individuals or group of individuals with profit earning as main objective.
-> Public Sector Enterprises: It implies all those enterprises which are managed, owned partly or wholly by Central or State Govt, with the main objective of public welfare.
-> Red Tapism and Bureaucracy : The practice of requiring excessive paper work and tedious procedures before official action can be considered or completed due to tall formal organisation structure.
-> Departmental Undertakings: Are the public enterprises created, managed and controlled by concerned ministres.
-> Statutory Corporations : It refers to the corporate body formed by a special Act of Parliament or Legislative assembly, which defines its powers, duties, privileges and pattern of management.
-> Financial Autonomy : Freedom to take financial decisions without any dependence on Govt., Bi iget and complete right to use the surplus in desired manner.
-> Managerial/Operational Autonomy : Freedom to takes managerial decisions to run the business without any constitutional or legal restriction, political interference.
-> Public Accountability : Answerability for financial resources allocation and final outcome to the Parliament and to audit and accounting control Authority of Govt.
-> Government Company: A Government company is a company in which not less than 51% of the paid-up share capital is held by Central or State Governments.