Departmental Undertakings are the common and more established form of establishing public enterprises. These enterprises are formed, operated, and part of the department of the ministry.
All the government works and activities are accomplished through this department, and cannot be entitled as independent or autonomous entities.
All the employees working in that department are under the government, therefore, they are termed as government employees. However, the government undertakings are divided into state and central government. Few examples of government undertakings are a railway, post office, etc.
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Advantages of Department Undertakings
- These allow the government to take control of all operation efficiently.
- These assure public accountability
- The revenue collected by the business is directly credited to the treasury which becomes a source of income for the government
- It has direct authority and guidance of the ministry, therefore, for national security, it is the best kind of undertaking
Disadvantages of Department Undertakings
- It doesn’t have flexibility which is essential for a business to run smoothly
- Employees are not allowed to take an independent decision. Therefore, it leads to a delay in decision making
- They cannot take advantage of business opportunities as they do not want to take a risk in new venture
- Unnecessary political interference
- They are insensitive to customer needs and do not give sufficient services to them
Characteristics of Department Undertakings
|The main characteristics of departmental undertakings are as follows:|
|Multiple Choice Questions:|
|Q.1- Types of departmental undertakings are-|
b. Post offices
c. Both A & B
d. None of the above
|Q.2- Name the organization which is formed for the public utilities|
|a. Cooperative societies
c. Departmental undertakings
d. None of the above
|Q.3- Identify the demerits of departmental undertakings:|
|a. The high degree of public accountability
b. Revenue goes to treasury
c. parliament have effective control
d. All of the above
|1-c, 2-c, 3-d|
|Important Topics in Business Studies:|
Departmental organization: It is the oldest form of business organization and it is common in many countries. Stay tuned to BYJU’S to learn more. Concept of Departmental Undertakings