Question

Differentiate between Departmental Organisation, Government Company and Public Corporation.

Answer 1

Sr. No.	Basis of Comparison	Departmental Organisation	Government Company	Public Corporation
1.	Formation	Departmental Organisation is created by a ministry of the Government	A government company is incorporated under the Companies Act, just like any other company.	A public corporation is created by a special Act of Parliament or a State Legislature.
2.	Legal Status	It does not have a separate legal entity of its own and is considered an integral part of the Government.	It has a separate legal entity which is distinct from its members and shareholders.	It has a separate legal entity with perpetual succession and a common seal.
3.	Ownership	It is wholly owned by the Government.	The Government owns at least 51 percent of its share capital, while the remaining shares can be owned by private individuals or foreign investors.	It is wholly owned by the Government, although it may also borrow funds if required.
4.	Financing	It is financed through the Government’s annual budget and it cannot borrow funds independently.	It has its own finances and can borrow funds independently for its operations.	It is financed mainly through public funds and government grants, but it enjoys greater financial independence compared to departmental undertakings.
5.	Management	It is managed by ministers and government officials under the direct supervision of the concerned ministry.	It is managed by a Board of Directors, which may include representatives from the Government as well as private shareholders.	It is managed by a Board of Directors who are appointed or nominated by the Government.
6.	Autonomy	It enjoys very little autonomy since all decisions are bound by government rules and ministerial control.	It enjoys considerable autonomy and faces less political interference compared to departmental undertakings.	It enjoys a high degree of autonomy in its day-to-day operations, although it remains accountable to Parliament or the State Legislature.
7.	Examples	Indian Railways, Post & Telegraph, Doordarshan	BHEL, SAIL, MTNL	LIC, RBI, Food Corporation of India