Please help with a suitable answer for Q-26.*the question is divided into two pages.*

Please help with a suitable answer for Q-26.*the question is divided into two pages.* 3

Dear Student

Public enterprises formed by special act of Parliament are known as Statutory Corporation. These corporation are also known as public corporation. Capital in these type of corporation is provided wholly by the government. There function, power and management are define by the Parliament.

Examples are : Life Insurance Corporation of India State Trading Corporation

MERITS
Essential services are provided.
Everyone shares in the profit from public ownership.
Wasteful duplication of services is eliminated.
Planning can be co-ordinated through central control.

DEMERITS
Inefficiency results due to the size of the organisation.
There is a lack of incentive for employees to perform if there is no share in the profit or there is an absence of other motivators such as productivity bonuses - accelerated promotion; (this factor can also apply in the private sector if the employee is not given any incentive to perform).
Losses must be met by the taxpayer.
Political interference can occur.
They interfere with the free market forces.
There may be difficulties in finding someone to deal with complaints, though this factor is applicable to any large organisation.
Regards

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