Question : Explain fully how a balance can be struck between autonomy and accountability of India’s public enterprises.
(2015)
Answer : Fine balance between autonomony and accountablity suggest that though public sector units must be accountable to parliament, government and larger public for their performance, fiscal conditions and achievement of the larger social objective but it should not hamper their autonomy. They should be free to take up investment decision, appointment of the head, tariff fixation, implementation of the government program.
Ways to find the balance–
Question : Argue the case for and against creating Indian Public Enterprises and Industrial Service for boosting the moribund public sector in India.
(2015)
Answer : Indian Public Enterprise and Industrial Service (IPEIS) –It is body of professionals to manage the PSUs.
For –
Against –
Question : “Public Sector Undertakings must learn to survive and be entrepreneurial without assured government budgetary support.” In the light of this statement give your suggestions for strengthening their autonomy and reviving the health of sick Public Sector Undertakings
(2014)
Answer : Role of PSU’s in the Indian economy has changed after the LPG reforms. Earlier they were the main tool for regional development, industrialization, human development, etc. But with LPG reforms, now almost all the sectors are open for private players and to achieve its goals PSUs have to become competitive also otherwise they will only become burden on Indian economy.
Government of India has taken many steps and many more are needed for proper restructuring of ....
Question : Autonomy to public sector undertakings is a myth. Analyze in the context of the use of government expenditure by politicians to control governments at different levels.
(2013)
Answer : The basic tenet of representative governments throughout the world is the supremacy of the representative institutions and their control over executive branch of the government. One of the most important dimensions of this is the control of legislature over use of public funds. Financial administration through its budgetary process and audit function enables and ensures the supremacy of the legislative body over the executive.
In India, the rationale for public enterprise had been based on the ....
Question : Is it correct to state that “one of the major reasons for failure of many … public sector undertakings was due to departures from the original concept of autonomy”?
(2011)
Answer : Autonomy of a public enterprise implies the freedom of action in day-to-day operations. Such Autonomy exists when the management policymaking and execution is free from political interference. Autonomy of management in a public enterprise is necessary in order to run the enterprise on business lines and to promote initiative and creativity on the part of its employees. The need for autonomy also arises to make quick decisions and to take prompt actions. When the decision-making ....
Question : Can the holding company’s structure act as an institutional change to add to efficiency? Give your answer with appropriate illustrations.
(2011)
Answer : Holding company is a company or firms that owns other companies outstanding stock. The term usually refers to the company which does not produce goods and service itself rather it purpose is to own share of other companies.
Holding companies allows the reduction of risk for the owners and can allow the ownership and control of a number of different companies. In the U.S.A. 80% or more of stock in voting and value must be owned ....
Question : With the creation of new regulatory agencies in the wake of liberalisation, overlapping jurisdictions and conflicts became the new trend. Is there a need for the creation of super-regulator or unified regulator?
(2010)
Answer : There is very little disagreement about the fact that the financial sector reforms undertaken in India since the 1990s have resulted in a blurring of distinctions between institutions. With the relaxation of balance sheet restrictions, existing institutions invest across a number of markets and products. Besides, a number of banks and financial institutions are gradually floating subsidiaries which enter into markets outside their dominant activity with a view to graduate into universal banks. At the ....
Question : “Memorandum of understanding scheme between government and public enterprises has forced public undertakings to improve the overall performance.” Comment.
(2007)
Answer : The era of Globalisation has facilitated the process of coming closer of government and public enterprises. As expected, it has brought about certain changes in the functioning of public undertakings for the good. The ongoing era of Globalisation, New Public Management as well asEntrepreneurial Government has enabled the public and private sectors to come closer through Memorandum of Understanding (MoU). This MoU regime has enabled an improvement in the performance of public undertakings.
Now public undertakings ....
Question : “The blame for our poor public sector performance can be laid on the way our bureaucracy is structured.” Comment.
(2007)
Answer : Our bureaucratic set up has still not been able to come out of colonial hangover. This also reflects itself in the poor performance of our public sector.
As public enterprises are invested from public funds and therefore they should be accountable to the people. As it cannot be accountable to the people directly it should be accountable to the parliament which represents people in a democracy.
Again in order to achieve growth, it is necessary that the ....
Question : “In the context of liberalisation, the role of public sector and its welfarist approach is being drastically changed”. Elucidate.
(2004)
Answer : Public Sector enterprises have been considered as key operational instrument to achieve the twin ideas of economic planning socialism, the two doctrines which had caught the imagination of non-welfare states which handled the first half of twentieth century. Planned economy was the method evolved by the socialists for achieving rapid economic development.
During the last fifty years, the role of the state in the economic and social development of a country has shifted dramatically.
The institution of ....
Question : “The steady expansion and the gradual decline of the public sector has been one of the most conspicuous developments in post independence India”. Discuss this statement and suggest measures to arrest the decline of the public sector in India.
(2003)
Answer : There was virtually no “public sector” in the Indian economy prior to independence. The idea that economic development should be promoted by the state actually managing industrial concerns did not take root in India before 1947, even though the concept of planning was very much discussed by congress government in the Indian provinces as far back as 1931. However, in the post-independence period, the expansion of public sector was undertaken as an integral part of ....
Question : “Public Undertakings no longer occupy commanding heights”. Commend.
(2002)
Answer : In public sector enterprises huge capital is locked up but these sector are faces with many serious difficulties and most of them are running in heavy losses. General impression about our public sector undertakings is that these are centre of corruption and dens of nepotism. Inefficiency breeds in these undertakings. It is said that these are very extravagant bodies because of which these are running into losses.
In India we have had a strong commitment to ....
Question : The role of public sector has been changing tremendously in the context of liberalisation.
(2002)
Answer : The Industrial Policy 1991, is a major departure from the hitherto followed policy according a dominant role to the public sector. Its feature are –
Question : “Despite liberalisation, privatisation and globalisation of economy the public sector has its own relevance for India.” Discuss the functions and role of public sector in the new economic scenario and the changes that they need to bring about in them.
(2001)
Answer : Public Sector Enterprises (PSEs) have been considered as key operational instrument to achieve the twin ideas of economic planning and socialism, the two doctrines which had caught the imagination of non-welfare states which handled the first half of twentieth century. Planned economy was the method evolved by the socialists for achieving rapid economic development.
However during the last two decades the view regarding the role of the states in the economic and social development has shifted ....
Question : Discuss the major problems of management and working of public sector under takings in India. Give suggestions in the light of liberalization policy to improve their performance.
(2000)
Answer : Public enterprises are those which are owned wholly or partially by the central government or a state government or jointly by central and state government and which are engaged in the industrial, agricultural, or financial activities having self-management.
Public enterprises in India are organized into four major patterns (principal forms)-departmental undertakings, public corporations, government companies, and holding companies. Besides, there are various other forms viz, commissions, control boards, cooperative societies, public trusts, and commodity boards.
These public ....
Question : “The public corporations in India are like exhausted Leviathans.” Comment.
(1999)
Answer : In India we have had a strong commitment to socialism where public ownership by itself is considered valuable. Our industrial policies aimed to make public enterprises pillars of our economy. Bigger public enterprises are formed as corporations. From a modest beginning of five undertakings with an investment of Rs. 29 crore in 1951, the public sector has grown to 242 undertakings with an investment of Rs. 193121 crore in 1996-97.
In India, both ideology and practical ....
Question : “Indian Public Enterprises are neither adequately ‘public’ nor truly ‘enterprising’.”
(1998)
Answer : A public undertaking is an industrial or commercial undertaking owned managed and controlled by the government to produce and supply goods and services to society. In India, public enterprises were initially provided adequate and feasible environment to flourish, to enhance the economic development and public enterprises, to use pattern of resource allocation, to remove the regional disparities through public enterprises, to bring socialistic pattern of society through equity.
As public enterprises are invested from public funds ....
Question : The departmental public undertaking have necessarily been placed under the full control of the government and parliament.”
(1995)
Answer : Public enterprises are those which are owned wholly or partially by the Central Government or a State Government or jointly by central and a state government. These are directly funded by public exchequer’s money. Due to this it becomes imperative for the government to control them and make them accountable. The Railways, Post and Telegraph are the two major departmental undertakings.
The principal objectives of control over departmental public undertaking are many, like promotion of efficiency, ....
