Question

Explain the characteristics of public sector enterprises.

Answer 1

1. State ownership: Public sector undertakings are entirely owned by the government or a public authority. For instance, the Reserve Bank of India is owned by the Central Government, whereas the Delhi Transport Corporation is owned by the Government of the National Capital Territory of Delhi. These public enterprises are structured as departmental undertakings, statutory or public corporations, and government companies.
2. Government control: The government holds the ultimate authority over a public sector undertaking.
3. Service motive: The main goal of a public sector undertaking is to provide services for the benefit of the general public, and it may generate some surplus while doing so.
4. Public accountability: Since public enterprises are funded by public money, they are accountable to the citizens through the parliament.