What do you mean by departmental undertaking.Explain its demerits and merits??

❖ Departmental Undertaking (DUs)

➢ Meaning: Such enterprises work directly under the ministries of the government, with noseparate legal existence. They have a high degree of accountability towards the public.➢ Features of Departmental UndertakingsThe following are the major features of departmental undertakings:i. These enterprises are provided funds from the annual budget and the treasury of theGovernment of India.ii. The employees in these enterprises are the servants of the government , as directed by theIAS.iii. These enterprises are regarded as the subdivisions of the government ; they are under thedirect control of the concerned ministry.iv. These enterprises are liable to the ministries that manage and control them.v. These enterprises are subject to government audit as applicable to other governmentactivities.➢ Merits of Departmental UndertakingsThe following are the merits of departmental undertakings:i. They are set up under an Act of Parliament and hence are easy to form.ii. As these enterprises work directly under the ministries of the government, they have a highdegree of public accountability.iii. The revenue earned by these enterprises directly goes to the government treasury andtherefore is a source of income for the government .iv. Strict accounting and auditing controls ensure optimum utilisation of resources .v. These enterprises have maximum degree of control by the Parliament , as they are setunder an Act of Parliament.➢ Limitations of Departmental UndertakingsThe following are the limitations of departmental undertakings:i. These enterprises face intervention from the concerned ministries that control and managethem.ii. The operations of these organisations often involve red tapism in the form of tedious paperworkand excessive regulations before the actual official action is taken.iii. Because these enterprises are strictly under the control of ministries, they are not independentin any form of decision making and therefore lack flexibility in operations .iv. These enterprises normally avoid undertaking risky projects; thus, they are said to beconservative in their approach.v. Because of lack of competition and inefficient management, these undertakings are oftenconsidered unresponsive towards the needs of the general public .like plz
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❖ Departmental Undertaking (DUs)

➢ Meaning: Such enterprises work directly under the ministries of the government, with noseparate legal existence. They have a high degree of accountability towards the public.➢ Features of Departmental UndertakingsThe following are the major features of departmental undertakings:i. These enterprises are provided funds from the annual budget and the treasury of theGovernment of India.ii. The employees in these enterprises are the servants of the government , as directed by theIAS.iii. These enterprises are regarded as the subdivisions of the government ; they are under thedirect control of the concerned ministry.iv. These enterprises are liable to the ministries that manage and control them.v. These enterprises are subject to government audit as applicable to other governmentactivities.➢ Merits of Departmental UndertakingsThe following are the merits of departmental undertakings:i. They are set up under an Act of Parliament and hence are easy to form.ii. As these enterprises work directly under the ministries of the government, they have a highdegree of public accountability.iii. The revenue earned by these enterprises directly goes to the government treasury andtherefore is a source of income for the government .iv. Strict accounting and auditing controls ensure optimum utilisation of resources .v. These enterprises have maximum degree of control by the Parliament , as they are setunder an Act of Parliament.➢ Limitations of Departmental UndertakingsThe following are the limitations of departmental undertakings:i. These enterprises face intervention from the concerned ministries that control and managethem.ii. The operations of these organisations often involve red tapism in the form of tedious paperworkand excessive regulations before the actual official action is taken.iii. Because these enterprises are strictly under the control of ministries, they are not independentin any form of decision making and therefore lack flexibility in operations .iv. These enterprises normally avoid undertaking risky projects; thus, they are said to beconservative in their approach.v. Because of lack of competition and inefficient management, these undertakings are oftenconsidered unresponsive towards the needs of the general public .like plzlike plz
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@ suhasi explain in short
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What is deprication?
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It is fall in value of fixed asset it can be due to effluix or obselent
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Meaning - Under departmental form of organisation, a public enterprise is run as a separate full-fledged ministry or as a major sub-division of a department of the Government.

Demerites-

(i) Read-Tape and Bureaucracy:

Departmental undertaking is run in a way other departments of the Government are run. Its management and functioning are subject to excessive red-tap and bureaucracy. (Red-tape means unnecessary and complicated officials rules which prevent things from being done quickly). As a result, the departmental undertaking loses all flexibility desired of a business enterprise.

(ii) Incidence of Additional Taxation:

Losses incurred by a departmental enterprise are met out of the treasury. This very often necessitates additional taxation the burden of which falls on the common man.

(iii) Lack of Competition:

A departmental undertaking often enjoys monopoly in its field. As a result, it tends to become indifferent to the quality and price of its goods and services; and may not hesitate to exploit the society.

(iv) Casual Approach to Work:

As officers of a departmental undertaking are subject to frequent transfers; they develop a sense of casual approach to work. As a result, the operational efficiency of the undertaking suffers a lot.

(v) Political Influence:

A departmental undertaking is subject to excessive political influence. Its fate depends on the balance of power between the ruling party and the opposition. As such, a departmental undertaking becomes a political organisation rather than an economic or business organisation.

(vi) Lack of Professional Management and Fear of Criticism:

A departmental undertaking is managed by civil servants, who do not possess professional management skills. Moreover, these managers could not afford to be innovative, because of a fear of criticism by the minister or the Parliament.

(vii) Financial Dependence:

A departmental undertaking is financially dependent on the Government’s budgetary allocations. As such, it cannot have its own independent long range investment decisions, which may bring enormous prosperity to the undertaking.

Thumps up pls

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department undertaking

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It is one of the oldest form of public sector enterprises
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it is the most famous mode of public enterprises it is govered by the govt . they are headed under the civil servants and ias. demerits delay in decision making , red tapism , unable to take advantage of business opportunity. merits. effeective control, high degree of public accountability, source of income for govt.
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The?departmental undertaking?is the oldest and traditional form of an organization of the public sector enterprise.It is organized, financed and controlled in such a manner that any other government organization. The?undertaking?is under the control of a minister who is responsible to the parliament.
Advantages?of the departmental undertaking
Following are the advantages of the departmental undertaking.
i. Easy Formation
It is easy to set up a departmental undertaking. The departmental undertaking is created by? an? administrative? decision of the Government, involving no legal formalities for its formation.
ii. Direct and Control of Parliament or State Legislature
The departmental undertaking is directly responsible to the Parliament or the State legislature through its overall head i.e. the minister concerned.
iii. Secrecy Maintained
Strategic industries like defence and atomic power cannot be better managed other than government departments. Department undertakings can maintain secrecy in their working.
iv. Lesser Burden of Tax on Public
Earnings of departmental undertaking are entirely paid into Government treasury, resulting in lesser tax burden on the public.
v. Instrument of Social Change
Government can promote economic and social justice through departmental undertakings.? Hence, a departmental undertaking canbe used by the Government, as an instrument of social change.
Disadvantagesof the departmental undertaking
Following are the major limitations of the departmental undertaking.
i. Red-tapism
There is too much of procedures which results in delay. Commercial organisation cannot afford delay in taking decisions.
ii. Incidence of Additional Taxation
Losses incurred bya departmental enterprise are met out of the treasury. This very often necessitates additional taxation the burden of which falls on the common man.
iii. Lack of Competition
Civil Servants are given control of these undertakings who may not have business outlook or commercial experience. So, they run the undertaking in their own fashion without considering the sovereignty of the consumers.
iv. Casual Approach to Work
As officers of a departmental undertaking are subject to frequent transfers; they develop a sense of casual approach to work. As a result, the operational efficiency of the undertaking suffers a lot.
v. Government Interference
There is an excessive government interference and control in department organisation. These undertakings are not given freedom to decide their own policies. Centralised control leads to delay in action. Red-tapism and bureaucracy have become the limiting features of these organisations


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