It is on the topic of Public Enterprises

1. 1
PRESENTED BY:
MRIGANK KULSHRESTHA

3. MEANING OF PUBLIC
ENTERPRISES
State enterprise is an undertaking
owned and controlled by the local or state
or central government. Either whole or
most of the investment is done by the
government. The basic aim of a state
enterprise is to provide goods and services
to the public at a reasonable rate though
profit earning is not excluded but their
primary objective is social service.

4. o“Public enterprises are autonomous or semi-
autonomous corporations and companies
established, owned and controlled by the state
and engaged in industrial and commercial
activities.”
-N.N Malaya
o “Public Enterprise means state ownership and
operation of industrial, agricultural, financial
and commercial undertakings.”
- A.H. Hansen

5. Characteristics of Public Enterprises:
• (i) Financed by Government:
• Public enterprises are financed by the government. They are either
owned by the government or majority shares are held by the
government. In some undertakings private investments are also
allowed but the dominant role is played by the government only.
• (ii) Government Management:
• Public enterprises are managed by the government. In some cases
government has started enterprises under its own departments. In
other cases, government nominates persons to manage the
undertakings. Even autonomous bodies are directly and indirectly
controlled by the government departments.
• (iii) Financial Independence:
• Though investments in government undertakings are done by the
government, they become financially independent. They are not
dependent on the government for their day- to-day needs. These
enterprises arrange and manage their own finances. An element of
profitability is also considered while pricing their products. It has
helped the enterprises to finance their growth themselves.

6. • (iv) Public Services:
• The primary aim of state enterprises is to provide
service to the society. These enterprises are started
with a service motive. A private entrepreneur will
start a concern only if possibilities of earning
profits exist but this is not the purpose of public
enterprises.
• (v) Useful for Various Sectors:
• State enterprises do not serve a particular
section of the society but they are useful for
everybody. They serve all sectors of the economy.

7.  Departmental Undertaking : form of organization is primarily used for
provision of essential services such as railways, postal services, broadcasting etc.
Such organizations function under the overall control of a ministry of the
Government and are financed and controlled in the same way as any other
government department. This form is considered suitable for activities where
the government desires to have control over them in view of the public interest .
Statutory Corporation (or public corporation) : refers to a corporate body
created by the Parliament or State Legislature by a special Act which define its
powers, functions and pattern of management. Statutory corporation is also
known as public corporation. Its capital is wholly provided by the government.
Examples of such organizations are Life Insurance Corporation of India, State
Trading Corporation etc.
Government Company : refers to the company in which 51 percent or more of
the paid up capital is held by the government. It is registered under the
Companies Act and is fully governed by the provisions of the Act. Most business
units owned and managed by government fall in this category
FORMS OF ORGANISATION OF PUBLIC ENTERPRISE

8. Advantages of Public Enterprises.
• Charges low prices.
• Provide essential facilities like education, health,
free or at reduced prices.
• Ensures efficient control of industry.
• Expert administrative services.
• Money can be made available for R&D.
• Private monopoly which would cause high prices
is avoided.
• Foreign denominations of the economy are
avoided.

9. Disadvantages of Public Enterprises
• Government must bear losses or this could lead to higher taxation.
• Consumers’ choice is restricted to the state if the business is a
monopoly.
• Regulations may be passed to curb the progress of private
business.
• Lack of competition may lead to inefficiency and higher prices.
• Government interference.
• Don’t care attitude.
• Political pressure.
• Corruption and embezzlement of funds.
• Foreign investment may be discouraged due to fear of
nationalization.