Public enterprises aim at public service in the public utility areas. They are expected to stabilize the supplies of essentials. The strategic and basic industries are taken care by Government only. Public sectors are there in the industrial line to have rapid and balanced economic development. The public sector consists of an expanding ring of organizations, with core government at the center, followed by agencies and public enterprises.
Public Enterprises are managed in the following ways:
- Government Department
- Public Corporation
- Government owned Joint Stock Company
- Mixed-ownership Corporations
Government Department – A separate department in the government manages this form of organization which normally caters to the public utility. Examples of this type of organizations are Post and Telegraph, Broadcasting, Railways and Defense industries etc. The minister in-charge of the particular department controls the enterprise. This form is adopted where secrecy and strict control are needed in the areas like defense and strategic industries.
Public Corporation – A public corporation is an artificial legal person created by a special Act which sets out the powers and functions. Public Corporations have financial independence and clear jurisdiction over a specific area, industry or commercial activity. A chosen Governing board manages the affairs of the organization. It enjoys the internal autonomy with no interference from government. Not only its formation is elaborate, any amendment also to be done by amending the Special Act and hence rigid. Public corporations are presently found in insurance, finance, industry, mining, transport, trade etc.
Government owned Joint Stock Company – The entire capital or 51 per cent or more of the share capital is owned by the Central and/or State Government. The concerned ministry performs the functions of shareholders and exercises control over the operations of the company. All or majority of the directors are nominated by the Government. One or few shares are in the name of the officials to take care of legal needs. This form of organization is more autonomous than Public Corporation
Mixed ownership corporations – This is a form of partnership between public sector and private sector enterprises. These are in the form of Joint Sector / Venture. It is a partnership among domestic partner, government and public. Additionally there may be one more player in the form of foreign collaboration. This enables to bring together capital, technology and skill from abroad, private sector and government. Hindustan Machine Tools is an example of Joint Sector.
