Question

limitation of departmental undertaking​.
explain six point...

Answer 1

Following are the major limitations of the departmental undertaking. There is too much of procedures which results in delay. Commercial organisation cannot afford delay in taking decisions. Losses incurred bya departmental enterprise are met out of the treasury

1.Lack of flexibility: the departmental undertakings are strictly under the control of parliament. The minister and the top financial managers also interfere frequently in its working.

2.Lack of motivation: In the absence of competition and profit motive, there is little incentive for hard work and efficiency. There is hardly any link between reward and the performance and promotions are based on the incentives.

3.Bureaucracy hinders benefits of business opportunities : These enterprises are not able to take the full benefits of business opportunities. Bureaucratic and conservative approach of the concerned ministry hinders their initiatives.

4.Red Taoism : Departmental undertakings suffer from red Taoism in its day-to-day working. Actions are taken only after following proper channels of authority.

5.Political interference : The political interference hinders the efficient working of these undertakings. Most of the time is elapsed in attending political meetings, implementing their recommendations, etc.

6.Consumer needs are ignored : These enterprises are insensitive to consumer needs and do not provide adequate services to them.

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Answer 2

Answer:

Departmental Undertaking :

Features :

The main characteristics of Departmental Undertaking are as follows :

• The funding of these enterprises come directly the Government Treasury. The revenue earned by these enterprises is also Paid to Treasury.

• They are subject to audit and Accounting controls.

• The employees of the enterprise are govt. Servants and their recruitment and conditions are headed by Indian Administrative service and Civil servants.

• They are subject to direct control of ministry and management is directly under the control of ministry.

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Merits :

Departmental Undertaking have certain merits, Some of are given below :

• These undertakings facilitate the parliament to excersize effective control over their operations.

• These ensure a high degree of public accountability.

• The revenue earned by the enterprise goes directly to Treasury and hence is a source of income of government.

• It is suitable since it is under the direct control and supervision of the concerned Ministry.

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Limitations :

This form of organisation suffers from serious drawbacks, Some of are given below :

• Departmental Undertaking fails to provide flexibility, which is essential for smoth operation.

• The employees are not allowed to take independent decisions, without approval of ministry.

• These enterprises are unable to take advantage of business opportunities.

• There is red tapism In day to day operations, and no action can b taken unless it goes through the proper channels of authority.

• There is a lot of political interference through the ministry.

• These organisations are usually intensive to consumer needs and do not provide adequate services to them.

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