Example for departmental under takings
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Meaning of Departmental Undertaking: Underdepartmental form of organisation, a public enterprise is run as a separate full-fledged ministry or as a major sub-division of adepartment of the Government. Forexample, the Indian Railways are managed by the Ministry of Railways
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Under departmental form of organisation, a public enterprise is run as a separate full-fledged ministry or as a major sub-division of a department of the Government.
For example, the Indian Railways are managed by the Ministry of Railways. Post and Telegraph services are run as a department, in the Ministry of Communication.
The Delhi Milk Scheme, All India Radio, Doordarshan are other examples of departmental undertakings.
Features of Departmental Undertaking:
The salient features of a departmental undertaking are as follows:
(i) Formation:
A departmental undertaking is established either as a separate full-fledged ministry or as a sub-division of a ministry (i.e. department) of the Government.
(ii) No Separate Entity:
A departmental undertaking does not have an independent entity distinct from the Government.
(iii) Ultimate Responsibility with the Minister:
The ultimate responsibility for the management of a departmental undertaking lies with the minister concerned; who is responsible to the Parliament or State Legislature for the affairs of the departmental undertaking. The minister, in turn, delegates his authority downwards to various other management levels, in the departmental undertaking.
(iv) Governmental Financing:
The departmental undertaking is financed through annual budget appropriations by the Parliament or the State Legislature. The revenues of the undertaking are paid into the treasury.
(v) Accounting and Audit etc. as Applicable to Government Departments:
The departmental undertaking is subject to the normal budgeting, accounting and audit procedures, which are applicable to Government departments.
(vi) Managed by Civil Servants:
The departmental undertaking is managed by civil servants, who are subject to same service conditions as applicable to civil servants of the Government.
(vii) Sovereign Immunity:
A departmental undertaking cannot be sued at all, without the consent of the Government.
Advantages of Departmental Undertaking:
Following are the advantages of the departmental undertaking:
(i) Easy Formation:
It is easy to set up a departmental undertaking. The departmental undertaking is created by an administrative decision of the Government, involving no legal formalities for its formation.
(ii) Direct and Control of Parliament or State Legislature:
The departmental undertaking is directly responsible to the Parliament or the State legislature through its overall head i.e. the minister concerned.
(iii) Secrecy Maintained:
The departmental undertaking can maintain secrecy of important policy matters; as the Government can withhold any information, in public interest.
(iv) Lesser Burden of Tax on Public:
Earnings of departmental undertaking are paid into Government treasury, resulting in lesser tax burden on the public.
(v) Instrument of Social Change:
Government can promote economic and social justice through departmental undertakings. Hence, a departmental undertaking can be used by the Government, as an instrument of social change.
(vi) Lesser Risk of Misuse of Public Money:
As the departmental undertaking is subject to budgeting, accounting and audit procedures of the government; the risk of misuse of public money is relatively less.
(vii) Guided by Rules and Regulations of the Ministry:
The officers of the departmental undertaking are under the direct administrative control of the ministry. They are guided by the rules and regulations of the ministry, framed with a focus on public welfare.
For example, the Indian Railways are managed by the Ministry of Railways. Post and Telegraph services are run as a department, in the Ministry of Communication.
The Delhi Milk Scheme, All India Radio, Doordarshan are other examples of departmental undertakings.
Features of Departmental Undertaking:
The salient features of a departmental undertaking are as follows:
(i) Formation:
A departmental undertaking is established either as a separate full-fledged ministry or as a sub-division of a ministry (i.e. department) of the Government.
(ii) No Separate Entity:
A departmental undertaking does not have an independent entity distinct from the Government.
(iii) Ultimate Responsibility with the Minister:
The ultimate responsibility for the management of a departmental undertaking lies with the minister concerned; who is responsible to the Parliament or State Legislature for the affairs of the departmental undertaking. The minister, in turn, delegates his authority downwards to various other management levels, in the departmental undertaking.
(iv) Governmental Financing:
The departmental undertaking is financed through annual budget appropriations by the Parliament or the State Legislature. The revenues of the undertaking are paid into the treasury.
(v) Accounting and Audit etc. as Applicable to Government Departments:
The departmental undertaking is subject to the normal budgeting, accounting and audit procedures, which are applicable to Government departments.
(vi) Managed by Civil Servants:
The departmental undertaking is managed by civil servants, who are subject to same service conditions as applicable to civil servants of the Government.
(vii) Sovereign Immunity:
A departmental undertaking cannot be sued at all, without the consent of the Government.
Advantages of Departmental Undertaking:
Following are the advantages of the departmental undertaking:
(i) Easy Formation:
It is easy to set up a departmental undertaking. The departmental undertaking is created by an administrative decision of the Government, involving no legal formalities for its formation.
(ii) Direct and Control of Parliament or State Legislature:
The departmental undertaking is directly responsible to the Parliament or the State legislature through its overall head i.e. the minister concerned.
(iii) Secrecy Maintained:
The departmental undertaking can maintain secrecy of important policy matters; as the Government can withhold any information, in public interest.
(iv) Lesser Burden of Tax on Public:
Earnings of departmental undertaking are paid into Government treasury, resulting in lesser tax burden on the public.
(v) Instrument of Social Change:
Government can promote economic and social justice through departmental undertakings. Hence, a departmental undertaking can be used by the Government, as an instrument of social change.
(vi) Lesser Risk of Misuse of Public Money:
As the departmental undertaking is subject to budgeting, accounting and audit procedures of the government; the risk of misuse of public money is relatively less.
(vii) Guided by Rules and Regulations of the Ministry:
The officers of the departmental undertaking are under the direct administrative control of the ministry. They are guided by the rules and regulations of the ministry, framed with a focus on public welfare.
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