By Harshvardhan, the Subject Matter Expert at Edumarz
Solution: The public sector consists of various organisations owned and managed by the government. These organisations may either be partly or wholly owned by the central or state government. They may also be a part of the ministry or come into existence by a Special Act of the Parliament. The government, through these enterprises, participates in the economic activities of the country. The government’s participation in business and economic sectors of the country needs some kind of organisational framework to function.
In the public sector, as it grows, an important question arises in respect of how it is to be organised or what form of organisation it should take. The government has a major role to play in the formation of the public sector. But the government acts through its people, its offices, employees and they take decisions on behalf of the government. For this purpose, public enterprises were formed by the government to participate in the economic activities of the country. They are expected to contribute to the economic development of the country in today’s liberalised, competitive world. These public enterprises are owned by the public and are accountable to the public through the Parliament. They are characterised by public ownership, public funds being used for their activities and public accountability.
A public enterprise may take any particular form of organisation depending upon the nature of its operations and its relationship with the government. The suitability of a particular form of organisation would depend upon its requirements. At the same time, in accordance with general principles, any organisation in the public sector should ensure organisational performance productivity and quality standards.
The forms of organisation that a public enterprise may take are as follows:
- Departmental undertaking
- Statutory corporation
- Government company