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Public enterprises are controlled & operated by the government either solely or in association with private enterprises. To produce supply goods & services required by the society Ultimate control of public enterprises remains with the state and the state runs it with a service motto.
It will includes all units, irrespective of risks involved and profit expected There is no lack in capital in public sector and business expansion is not difficult Public sector prevents concentration & unbalanced growth of industry.
All activities are accountable to their respective govt. or national parliament. A public enterprise is seldom as efficient as private enterprise, wastage and inefficiency can seldom reduce a minimum
The Hindustan ship yard, the Hindustan steels, Hindustan Machine tools ,Bharat Heavy Electricals Indian Telephone Industries; Indian airlines, Life Insurance Corporation of India etc are few examples of Public Sector.
Types of Corporations
1) Government departments: These enterprise are financial organized and controlled by the government like any other government department under concern ministry . e.g.-Railways, defense, post and telegraph dooradarshan etc.
2) Public Corporations:
It is established by special act of parliament with internal autonomy.
Its 100% capital is subscribed by the state and it is owned by state. However minister and civil servants do not interfere in its day to day work.
The BOD controls day to day affairs and the requirements & the organization of the corporations, but final control remains with the govt. E.g.: LIC of India, state power corporations, Indian airlines, State Road transport corporations etc
3) Government companies.
According to company Act the Government company is one in which the state, central or both govt held at least 51% of share capital to the company .
Eg. BHEL, Hindustan Steel Etc.