Meaning of Public Enterprises

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MEANING OF PUBLIC ENTERPRISES As state earlier, the business units owned, managed and controlled by the central, state or local government are termed as public sector enterprises or public enterprises. These are also known as public sector undertakings. A public sector enterprise may be defined as any commercial or industrial undertaking owned and managed by the government with a view to maximize social welfare and uphold the public interest. Public enterprises consist of nationalized private sector enterprises, such as, banks, Life Insurance Corporation of India and the new enterprises set up by the government such as Hindustan Machine Tools (HMT), Gas Authority of India (GAIL), State Trading Corporation (STC) etc. CHARACTERISTICS OF…show more content…
In this section let us know the differences between the enterprises of public sector and private sector. Basis of difference | Private sector enterprises | Public sector enterprises | Objective | Maximization of profit | Maximize social welfare and ensure balanced economic development | Ownership | Owned by individuals | Owned by Government | Management | Managed by owner and professional managers | Managed by Government | Capital | Raised by owners through loans, private sources and public issues | Raised from government funds and sometimes through public issues | Area of Operation | Operates in all areas with adequate return on investment | Operates in basic and public utility sectors | FORMS OF ORGANISATION OF PUBLIC ENTERPRISES There are three different forms of organization used for the public sector enterprises in India. These are (1) Departmental Undertaking; (2) Statutory (or Public) Corporation, and (3) Government Company. Departmental Undertaking form of organization is primarily used for provision of essential services such as railways, postal services, broadcasting etc. Such organizations function under the overall control of a ministry of the Government and are financed and controlled in the same way as any other government department. This form is considered suitable for activities where the government desires to have control over them in view of
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