Private, Public and Global

Enterprises
Private, Public and Global Enterprises

Topics Covered

 Departmental Undertakings
 Statutory Corporation
 Government Company
 Global Enterprises
 Public Private Partnership
Indian economy is a MIXED ECONOMY
We have discussed in previous chapter……

Owned , Sole Objective

controlled and
managed Profit

Private
enterprises

Sole Joint Hindu Cooperative Joint stock Multinational

Partnership
proprietorship Family Society Company Cooperation
 PUBLIC SECTOR ENTERPRISES

businesses which are owned, controlled and managed by the

government.

These are either partly or wholly owned by the state or central government..

Their objective is
TYPES OF PUBLIC SECTOR ENTERPRISES
Meaning – Departmental Undertaking
Features - DEPARTMENTAL UNDERTAKING
 Operations of DU are effectively controlled by Government

The Public Accountability is ensured as the performance of DU are discussed

in the Parliament

Revenues form these enterprises increase government Income

This is the most suitable undertaking as far as national security is concerned

Merits - DEPARTMENTAL UNDERTAKING

 These enterprises are
Departmental There is a lot of
unable
undertakings fail political interference
to take advantage of
to provide flexibility through the ministry
business
opportunities

These organisations
Not allowed to take There is red tapism are usually
independent in day-to-day insensitive to
decisions operations consumer needs

Demerits - DEPARTMENTAL UNDERTAKING

Meaning – Statutory Corporations
  Statutory corporations are formed by a Special Act of Parliament which
defines their objectives, powers and limitations

 They are under the control of state government. Thus, the government
enjoys the profits and bears the losses of a statutory corporation.

 It is a separate legal entity. Thus, it can sue or can be sued, enter into
contract and can purchase property in its own name

 It manages finance on its own by borrowing from the government or

from the public. It has the authority to use its own revenues in case of
low sale of goods and service ( Borrowings from the government or
revenues earned from the public)

Features – Statutory Corporations

  It is not subject to accounting and audit controls. ( Not concerned with
the Central budget)

 Employees of statutory corporations are not government employees.

 Political and parliamentary interference is not present in these

enterprises.

Features – Statutory Corporations

 They have
freedom and
operational
flexibility

Minimal or no
Help in
interference
economic
from the
development
government

Decision Employees
making is are very
quick efficient

Advantages – Statutory Corporations

In reality, these organisations
do not enjoy much flexibility

The government interferes in

the decisions where huge funds
are involved

The government interferes in

the decisions where huge funds
are involved

Corruption is present

Disadvantages – Statutory Corporations

Government company
 Government company

According to the Indian Companies Act, 1956, a

government company is any company in which not less
than 51 percent of the paid up capital is held by

• the central government, or

• by any state government or

• partly by the central government and partly by one or

more state governments
• It is formed by the Indian Companies Act, 1956.

• It can sue and can be sued by others.

• It has a separate legal entity.

• The provisions of the Act regulate the management of the company.

• The funds of a government company are obtained from government and

private shareholders. It can also raise capital by issuing securities in the
capital market.

Features – Government Company

Merits and Demerits – Government Company
Comparison or Difference between the Public
Sector enterprises
Comparison or Difference between the Public
Sector enterprises
Global Enterprises 0r
Multi National Corporations
Global Enterprises 0r
Multi National Corporations

These are gigantic corporations which have their operations in a number of countries.

They are characterized by their huge size, large number of products, advanced
technology, marketing strategies and network of operations all over the world..

These are huge industrial organizations which extend their industrial and marketing
operations through a network of their branches in several countries.
 These enterprises have huge
financial resources and have the
ability to raise funds from
different sources. eg: equity,
loan etc
These enterprises have research
and development departments
which continuously work towards
innovating new products and
making developments to existing
product
Features – Global Enterprises
These enterprises possess
technological superiorities in
their methods of production.
They conform to
international standards and
quality specifications
These MNCs may collaborate with
companies in the public and
private sector. eg: sale of
technology, production of goods,
use of brand names
MNCs have their headquarters
located in their home country
from where they exercise control
on all their subsidiaries and
branches spread all over the world.
Public Private Partnership 0r
PPP 0r P3

Public–private partnership is an agreement between a public sector enterprise

and a private party wherein the skills and assets of both are shared so as to
deliver a service to the public of the country.
PPP