Question

Write short answer to the followings.

How are Departmental undertakings useful?

Answer 1

The usefulness of departmental undertakings can be understood by studying the following merits of departmental undertakings:
i. Easy formation- They are set up under an Act of Parliament and do not require a special statute or registration. Thus, they are easy to form.

ii. Efficiency- As these enterprises work directly under the ministries of the government, they ensure a high degree of public accountability. This in turn ensures efficiency.

iii. Source of income- The revenue earned by these undertakings directly goes to the government treasury. So, these undertakings are a source of income for the government.

iv. Optimum utilization of resources- Strict accounting and auditing controls ensure optimum resource utilisation. Also with the qualified government staff, the organization and activities are managed properly.