Question

Page 3
Question 7-
6 Marks
Oil and Natural Gas Corporation (ONGC) is an Indian multinational oil and gas company
in India. It is India's largest oil and gas exploration and production company. It produces
around 70% of India's crude oil (equivalent to around 30% of the country's total demand)
and around 62% of its natural gas.
ONGC was founded on 14 August 1956 by Government of India, which currently holds
a 68.94% equity stake
(a) How will you categorise Oil and Natural Gas Corporation as a public sector
enterprise?
(b) State any four features of this form of organisation.​

Answer 1

Answer:

This is the oldest form of public sector enterprises. The departmental undertaking is considered as one of the departments of government. It has no separate existence than the government. It functions under the overall control of one ministry or department of government.

For example, Railways, post & telegraph, broadcasting, telephone service etc.

Features of departmental undertakings:-

The main characteristics of departmental undertakings are:-

They operate under the overall control of one of the ministries of central or state government.

They are a part of government only, there is no separate entity.

The revenue of departmental undertakings is deposited in the treasury of government.

They are financed from the annual budgets of the government.

Merits of departmental undertakings:

It is very easy to form a departmental undertaking as no registration is compulsory.

There is direct parliamentary control. The performance of departmental undertakings can be discussed in parliament. So there is public accountability.

The revenue of departmental undertaking is deposited in the treasury of the government. So these undertakings help to increase the government revenue.

Explanation:

Public sector organizations are formed in three different forms:

Departmental undertakings

Public corporations/statutory corporations

Government company

Companies can either be the private company or public company. Also, there are many types of public sector organizations such as departmental undertakings, government companies etc. So let us take a more detailed look at both these types of companies and public sector organizations.Private sector companies are companies which are not run by the government. They are the part of a country’s economic system and is run by individual and companies with the intention to earn the profit.