The activities performed by departmental undertakings are integral part of the government.
Formation: A departmental undertaking is established either as a separate full-fledged ministry or as a sub-division of a ministry (i.e. department) of the Government.
No Separate Entity:A departmental undertaking does not have an independent entity distinct from the Government.
Ultimate Responsibility with the Minister: The ultimate responsibility for the management of a departmental undertaking lies with the minister concerned; who is responsible to the Parliament or State Legislature for the affairs of the departmental undertaking. The minister, in turn, delegates his authority downwards to various other management levels, in the departmental undertaking.
Governmental Financing: The departmental undertaking is financed through annual budget appropriations by the Parliament or the State Legislature. The revenues of the undertaking are paid into the treasury.
Accounting and Audit etc. as Applicable to Government Departments:The departmental undertaking is subject to the normal budgeting, accounting and audit procedures, which are applicable to Government departments.