Give the advantages of statutory corporations over departmental undertakings in respect of efficiency, organisation and control
Answers
Explanation:
Some relative advantages of public corporations over departmental organisation are
(i) Funds The funds of public corporations do not come from the central budget. Thus, file government generally does not interfere in their financial matters, including their income and receipts. Whereas in departmental undertaking, the revenue earned by the enterprise goes directly to the government treasury and government have full control over financial matters of the enterprise.
(ii) Operations Public corporations enjoy independence in their functioning and a high degree of operational flexibility. Whereas in departmental undertakings, Parliament exercise full control on operations.
(iii) Control A public corporation is an autonomous body, enjoys flexibility. Whereas in departmental undertakings, there is excessive centralisation or control.
Answer:
The main advantages of the statutory corporation are:
Initiative & flexibility: Operations & management of a statutory corporation is done independently, without any government’s interference, with its own initiative & flexibility.
Administrative autonomy: A public corporation is able to manage its affairs with independence & flexibility.
Quick decisions: A public corporation is relatively free from red-tapism, as there is less file work & less formality to be completed before taking decisions.
Service motive: The activities of the public corporation are discussed in parliament. This ensures the protection of public interest.
Efficient staff: The public corporations can have their own rules & regulations regarding remuneration & recruitment of employees. It can provide better facilities & attractive terms of service to staff to secure efficient working from its staff.
Professional management: Board of directors of statutory corporation consists of business experts & the representatives of various groups such as labor, consumers nominated by the government.
Easy to raise capital: As such corporations are fully owned by the government, they can easily raise required capital by floating bonds at a low rate of interest. Since these bonds are safe, the public also feels comfortable in subscribing such bonds.