Chapter 3 Flashcards
global, public and private enterprises
What happened in 1948
- industrial policy resolution
- no of industries were reserved for public sector and the rest were given to the private through licensing
What happened in 1956
- industrial policy resolution
- certain objectives for the public sector to follow was laid down to accelerate the rate of growth
- public sector was given importance but mutual dependancy was emphasisied
What happened in 1991
- the 1991 industrial policy
- deliberately disinvested from public sector to allow more freedom in private sector
- companies outside of india were also invited invest in india therefore making global enterprises a part of the indian economy too
what economy is the indian economy
The indian economy is a mixed economy with both privately owned and government owned business
What does the private sector consist of
the private sector consists of business owned by individual or a group of individuals . sole propreitorship, joint hindu family, cooperative stores, joint stock company, partnership
What are the different types of public sector organisations
- departmental undertakings
- statutory corporation
- government companies
What does the public sector consists of
The public sector consists of various organisations owned or manged by the government these maybe owned partly or fully by a state government or central government or both. it can be a part of the ministry or come into existence by a special act of the parliament
Features of departmental undertakings (5)
- finance
- accounting system
- management
- appointment of employees
- accountability
define departmental undertakings
- oldest and most traditional form of organising pubic enterprises
- they are not independant instituitions and can be under state or central government
Features of departmental undertakings - finance
It is given from the governments treasury during the yearly allocation of budget the money earned from these organisations is also given to the governments treasury
Features of departmental undertakings - accounting system
The organisation is also subject to accounting and audit controls like any other government avtivities.
Features of departmental undertakings - management
it is subject to direct government control from the respected ministry. It is a major subdivision of a government department and is managed and controlled by it
Features of departmental undertakings - appointment of employees
- the employees will be considered as government employees
- they will be recruited through tests like UPSC under SSB - staff selection board
- They are headed by indian administrative officers (IAS) officers who are transferrable from one ministry to another
Features of departmental undertakings - accountability
- They are accountable to the ministry since they are directly under the control of the ministry
- They are also responsible to the parliament and people as they are using money from treasury which is people tax money
Merits of departmental undertakings (4)
- source of income
- suitable for national security
- answerable to parliament
- complete government control
Merits of departmental undertakings - source of income
The revenue earned by the organisations go directly to the national treasury therefore it is a income for the government
Merits of departmental undertakings - suitable for national security
It is the safest as it is directly under a ministry and is controlled and supervised by the concerned ministry
Merits of departmental undertakings - answerable to parliament
All departmental undertakings are accountible to the parliament and have a high degree of public accountability , so they have to be careful about their progress and performance
Merits of departmental undertakings - complete government control
It is completely managed, owned and controlled by the government ministry
- it facilitates the parliament to excercise effective control over their operations
De merits of departmental undertakings (6)
- lack of flexibility
- delay in decision making
- conservative approach
- red tapism
- undue government influence
- indifferent to consumer needs
De merits of departmental undertakings - lack of flexibility
- There is little scope for exercising initiative and making improvements . (ex. employees slacking)
- Departmental undertakings lack to provide flexibility which is essential .
De merits of departmental undertakings - delay in decision making
The employees are not allowed to take individual decisions and must consult the ministry everytime which causes in delay in decision making when apt prompt decisions need to be made.
De merits of departmental undertakings - conservative approach
Since it is the public tax money and the government is responsible for it, it wont take many high risk ventures which will be more profitable and be conserved in their business approaches
De merits of departmental undertakings - red tapism
- No decision is taken without going through proper channels, hierarchy.
- This might create problems in the operation of the business.