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INDIAN ECONOMY, DEPARTMENTAL UNDERTAKING
Inflexible No room for…
INDIAN ECONOMY
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PUBLIC SECTOR
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Changing roles
- Development of infrastructure
- Regional Balance
- Economies of Sale
- Check ever-concentration of economic powers
- Import substitution
- Govt policy towards public sector since 1991
DEPARTMENTAL UNDERTAKING
- Inflexible No room for independent decisions Unuse of business opportunities.
- Delayed process High red-tapism High political interference Insensitive to consumer needs
ADVANTAGES
-Facilitates parliament in effective control of operations
-Ensures public accountability
-Source of Government income
-No compromisation in national security
FEATURES
-Government Funding
-Subject to accounting and audit controls
-Employees are government servants, headed by -IAS officers
-Under direct control of the ministry
-Managed by ministry
LIMITATIONS
- Inflexible
-No room for independent decisions
- Unuse of business opportunities
-Delayed process
-High red-tapism
-High political interference
-Insensitive to consumer needs
STATUTORY CORPORATIONS
This is a corporate body created by the legislature with defined powers and functions and is financially independent with a clear control over a specified area or a particular type of commercial activity
ADVANTAGES
-Independent and flexible
-No government interference
-financial matters
-Autonomous
-Acts as an instrument for economic developmen
LIMITATIONS
-Flexibility is often hampered
-Governmental interference in matters
-huge funds
-Rampant Corruption
-Advisors are hired for Corporation Board
FEATURES
-Governed by Act of Parliament Wholly owned by the state
-Can sue and be sued, enter into a contract
-Obtains funds from borrowings
-* Non-subjectable to accounting and audits Employees are not government servants
GOVERNMENT COMPANIES
Any company in which not less than 51% of the paid-up capital is held by the central government, by any state government, or partly by the Central government and partly by one or more State governments and includes a company that is a subsidiary of a government company
ADVANTAGES
-Easy establishment
-Consists of a separate legal entity
-Autonomous
-Can curb unhealthy business practises
LIMITATIONS
Provisions of the Company Act aren't much effective
-Evades constitutional responsibility
-Management and administration rests with the government
FEATURES
-Created under the Companies Act, 2013
-A lawsuit can be filed against the third party
-Can enter into contract
- Management is regulated by the Act
-Employees are hired as per company's rules and regulations
-Exemption from accounting and audit
-Obtains funds from government shareholdings
JOINT VENTURE
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BENEFITS
-Contractual a new jointly-owned entity is not created There is only an agreement to work together.
-Equity-based An equity joint venture agreement is one in which a separate business entity, jointly owned by two or more parties, is formed in accordance with the agreement of the parties
PPP: Public Private Partnership
The Public Private Partnership model allocates tasks, obligations and risks among the public and private partners in an optimal manner
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GLOBAL ENTERPRISES
huge industrial organisations which extend their industrial and marketing operations through a network of their branches in several countries.
These enterprises operate in several areas producing multiple products with their business strategy extending over a number of countries
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