Commercial Applications
Answer
Public sector enterprises are business enterprises owned and operated by the government or any of its agencies. The public sector consists of all those undertakings which are owned and controlled by the Central Government, State Governments or municipal bodies.
Main Characteristics:
State Ownership — Public sector undertakings are fully owned by the government or some public authority. For example, the Reserve Bank of India is owned by the Central Government, while the Delhi Transport Corporation is owned by the Government of NCT of Delhi.
Government Control — The ultimate control of a public sector undertaking lies with the government. The government appoints the board of directors, approves major policies, and supervises the operations.
Service Motive — The primary objective of public sector undertakings is to render service to the public at large. In order to serve the public, the enterprise may earn some surplus, but profit maximisation is not the main goal.
Public Accountability — The money invested in public enterprises is public money. Therefore, these enterprises are answerable to the public through the Parliament. The audit by the Comptroller and Auditor General (CAG) of India ensures proper use of funds.
Organisational Forms — Public enterprises are organised as departmental undertakings, statutory or public corporations, and government companies.
Capital from Government — The capital is provided by the government from the public budget, public loans, or other public sources.
Operation in Strategic Sectors — Public sector enterprises typically operate in strategic and essential sectors such as defence, railways, atomic energy, banking, and infrastructure.
Welfare Orientation — They contribute to balanced regional development, generate employment in backward areas, and provide essential goods and services at affordable prices.
Bureaucratic Management — Decision-making is often slower due to government procedures, audit checks, and political considerations.
Examples — Indian Railways, Posts and Telegraphs, Food Corporation of India, Reserve Bank of India, Delhi Transport Corporation, ONGC, BHEL, SAIL, LIC.