What do you mean by departmental undertaking.Explain its demerits and merits??
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❖ Departmental Undertaking (DUs)
➢ Meaning: Such enterprises work directly under the ministries of the government, with noseparate legal existence. They have a high degree of accountability towards the public.➢ Features of Departmental UndertakingsThe following are the major features of departmental undertakings:i. These enterprises are provided funds from the annual budget and the treasury of theGovernment of India.ii. The employees in these enterprises are the servants of the government , as directed by theIAS.iii. These enterprises are regarded as the subdivisions of the government ; they are under thedirect control of the concerned ministry.iv. These enterprises are liable to the ministries that manage and control them.v. These enterprises are subject to government audit as applicable to other governmentactivities.➢ Merits of Departmental UndertakingsThe following are the merits of departmental undertakings:i. They are set up under an Act of Parliament and hence are easy to form.ii. As these enterprises work directly under the ministries of the government, they have a highdegree of public accountability.iii. The revenue earned by these enterprises directly goes to the government treasury andtherefore is a source of income for the government .iv. Strict accounting and auditing controls ensure optimum utilisation of resources .v. These enterprises have maximum degree of control by the Parliament , as they are setunder an Act of Parliament.➢ Limitations of Departmental UndertakingsThe following are the limitations of departmental undertakings:i. These enterprises face intervention from the concerned ministries that control and managethem.ii. The operations of these organisations often involve red tapism in the form of tedious paperworkand excessive regulations before the actual official action is taken.iii. Because these enterprises are strictly under the control of ministries, they are not independentin any form of decision making and therefore lack flexibility in operations .iv. These enterprises normally avoid undertaking risky projects; thus, they are said to beconservative in their approach.v. Because of lack of competition and inefficient management, these undertakings are oftenconsidered unresponsive towards the needs of the general public .
➢ Meaning: Such enterprises work directly under the ministries of the government, with noseparate legal existence. They have a high degree of accountability towards the public.➢ Features of Departmental UndertakingsThe following are the major features of departmental undertakings:i. These enterprises are provided funds from the annual budget and the treasury of theGovernment of India.ii. The employees in these enterprises are the servants of the government , as directed by theIAS.iii. These enterprises are regarded as the subdivisions of the government ; they are under thedirect control of the concerned ministry.iv. These enterprises are liable to the ministries that manage and control them.v. These enterprises are subject to government audit as applicable to other governmentactivities.➢ Merits of Departmental UndertakingsThe following are the merits of departmental undertakings:i. They are set up under an Act of Parliament and hence are easy to form.ii. As these enterprises work directly under the ministries of the government, they have a highdegree of public accountability.iii. The revenue earned by these enterprises directly goes to the government treasury andtherefore is a source of income for the government .iv. Strict accounting and auditing controls ensure optimum utilisation of resources .v. These enterprises have maximum degree of control by the Parliament , as they are setunder an Act of Parliament.➢ Limitations of Departmental UndertakingsThe following are the limitations of departmental undertakings:i. These enterprises face intervention from the concerned ministries that control and managethem.ii. The operations of these organisations often involve red tapism in the form of tedious paperworkand excessive regulations before the actual official action is taken.iii. Because these enterprises are strictly under the control of ministries, they are not independentin any form of decision making and therefore lack flexibility in operations .iv. These enterprises normally avoid undertaking risky projects; thus, they are said to beconservative in their approach.v. Because of lack of competition and inefficient management, these undertakings are oftenconsidered unresponsive towards the needs of the general public .
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Achievement of Objectives: Departmental undertaking is in the direct and complete government control over them which makes it easy to achieve its econ
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