List the names of some enterprises under the public sector and classify them.


By Harshvardhan, the Subject Matter Expert at Edumarz

Solution: The names of some enterprises under the public sector are:

  1. Indian Railways
  2. Life Insurance Corporation of India
  3. Employee State Insurance Corporation
  4. Air India

The Indian Railway is a Departmental Undertaking, The LIC and ESIC are Statutory Corporations and Air India is a Government Company.

Departmental Undertakings is the oldest and most traditional form of organising public enterprises. These enterprises are established as departments of the ministry and are considered part or an extension of the ministry itself. The Government functions through these departments and the activities performed by them are an integral part of the functioning of the government. They have not been constituted as autonomous or independent institutions and as such are not independent legal entities. They act through the officers of the Government and its employees are Government employees. These undertakings may be under the central or the state government and the rules of central/state government are applicable. Examples of these undertakings are railways and post and telegraph departments.

Statutory corporations are public enterprises brought into existence by a Special Act of Parliament. The Act defines its powers and functions, rules and regulations governing its employees and its relationship with government departments. This is a corporate body created by the legislature with defined powers and functions and is financially independent with clear control over a specified area or a particular type of commercial activity. It is a corporate person and has the capacity of acting in its own name. Statutory corporations, therefore, have the power of the government and a considerable amount of operating flexibility of private enterprises.

A government company is established under The Companies Act, 2013 and is registered and governed by the provisions of The Act. These are established for purely business purposes and in true spirit compete with companies in the private sector. According to section 2(45) of the Companies Act 2013, a government company means any company in which not less than 51 per cent of the paid-up capital is held by the central government, or by any state government or partly by Central government and partly by one or more State governments and includes a company which is a subsidiary of a government company. Under the Companies Act 2013, there is no change in the definition of a company. All provisions of the Act are applicable to government companies unless otherwise specified. A government company may be formed as a private limited company or a public limited company. There are certain provisions that are applicable to the appointment/retirement of directors and other managerial personnel. From the above, it is clear that the government exercises control over the paid-up share capital of the company. The shares of the company are purchased in the name of the President of India. Since the government is the major shareholder and exercises control over the management of these companies, they are known as government companies.

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