With limited resources available within the control of the owner, decision-making becomes easy and efficient. These enterprises are known collectively as the public sector. The passage of Industrial Policy Resolution of 1956 and the adoption of the Socialist Pattern of Society as our national goal, further led to deliberate enlargement of the role of public sector. The Parliamentary Control : The parliamentary control over public undertaking has been unsystematic, haphazard and ineffective. The government also controls the fixation of prices of goods produced by the enterprises as well as the quantum and rate of payment for services rendered. The advantage of this sector is it requires less investment, thus creating employment on a large scale, and reducing the employment and underemployment problems.
The government stands empowered to appoint the chairman and members of the board of management and the managing director. Industries Development and Regulation Act, 1951 was also introduced to regulate and control industries in the country. There are few restrictions on its owners for attaining the objects and policies of the enterprise. The approval of the government is required about the forms for maintaining the accounts of the enterprise and for their audit. This loan has played an active role in the promotion and development of the small business industry. Fine information related to the National Institute for Micro Small and Medium Enterprises.
Except for the formal policy directions issued to it by a minister, it is guided by the statute which created it. The major objective of the scheme is to import costly machinery on hire-purchase basis. It is usually independently financed except for appropriations to provide capital or to cover losses. In India public sector has achieved commanding position in several industries. Mini Tools Room and Training Centre Scheme To assist state the Governments set up Mini Tool Room and Training Centres, the Government of India provides financial assistance in the form of one-time grant-in-aid. Similarly the power of issuing directives is the most important power which is exercised by a minister. However, in a Public enterprise any change in objects and policies requires the approval of the Government and its functionaries.
We therefore, recommend that the government should adopt the form of Public Corporation as the general rule for the industrial and commercial undertakings in the public sector in India. The ministers usually issue clear directives in writing as they are supposed to do and take responsibility for such directives before the Parliament. As in case of a large corporation wherein a specialist is required for every departmental functioning because of complex organizational structure, a small enterprise does not need to hire an external specialist for its management. The public corporation are generally exempt from regulatory and prohibitory statutes applicable to the expenditure of public funds and are not subject to budget, accounting and audit procedures which are applicable to non-corporate agencies. Both the existing and the new enterprises are eligible for the scheme.
State control: The ultimate control of a public enterprise lies with the Government which appoints its Board of Directors and the Chief Executive. The scheme also caters rehabilitation assistance to existing sick units. The undertakings that require a high degree of freedom, boldness and enterprise in management must be free from the circumspection and cumbersome, time-consuming and vexatious procedures of departmental administration. It provides for a healthy mix of commercial efficiency of a private enterprise with public accountability of a government department and provides freedom from unsuitable rules, regulations and controls of the government. The departmental management was found justified for special reasons like defence, strategic or security needs or for purposes of economic control and the company form should have been an exception for organisations of specific nature. In addition, arranging collateral security or third party guarantee is the tough proposition for them.
The national consensus was in favour of rapid industrialisation of the economy which was seen as the key to economic development, improving living standards and economic sovereignty. Tiny sector incorporating investment in industrial units in plant and machinery up to Rs. It is a separate entity for legal purposes and can sue and be sued, enter into contracts and acquire property in its corporate name. Since the inception of this scheme, more than 28,287 units have availed subsidy of Rs. Hence, the indirect expenses incurred by the owner is also low.
It is created by a special law of legislature which may be enacted by Central or state governments. The scheme also offers rehabilitation assistance to sick units covered under the guarantee scheme. The fund is supposed to be utilized for providing easy, convenient, cheap and collateral free loans to the women, scheduled tribe and scheduled caste entrepreneurs in order to promote micro enterprises. Central Public Sector Undertakings: There were 236 Central public sector undertakings excluding banks in 1996-97. This government-led industrial policy, with corresponding restrictions on private enterprise, was the dominant pattern of Indian economic development until the. Additionally, 's government fourteen of India's largest private banks in 1969, and an additional six in 1980. They have also chosen to depend upon influence and secure compliance of their wishes through informal means like appointment of officials and non-officials as chairman and members of governing boards; deputising serving government officers to executive posts in public undertakings.
As to the small-scale sector, the resolution continued to give increasing importance to small-scale enterprises to serve the objective of employment generation. Later, this term was adopted in the courts of Gupta emperor and Mughal emperor , as the collective name for at their respective courts. The management has to abide by the guidelines laid down by the owners. A sub-clause of the same clause lays down that, if any dispute arises between the Central government and the corporation, the decision of the Central government shall be final and binding. Though India is still facing infrastructural problems, lack of proper market linkages, and challenges in terms of flow of institutional credit, it has seen a tremendous growth in this sector. The main short comings are as follows: 1 Heavy losses.