Meaning of Public Corporation:
A public corporation is that from of public enterprise which is created as an autonomous unit, by a special Act of the parliament or the state Legislature.
Since a public corporation is created by a statute; it is also known as a statutory corporation.
The statute defines the objectives, powers and functions of the public corporation. Life Insurance Corporation of India, the Indian Airlines, the Air India International, Oil and Natural Gas Commission etc. are some examples of public corporations, in India.
Features of Public Corporation:
Following are the salient features of a public corporation:
(i) Special Statute:
A public corporation is created by a special Act of the parliament or the State Legislature. The Act defines its power, objectives, functions and relations with the ministry and the parliament(or state Legislature).
(ii) Separate Legal Entity:
A public corporation is a separate legal entity with perpetual succession and common seal. It has an existence, independent of the Government. It can own properly; can make contracts and files suits, in its own name.
(iii) Capital Provided by the Government :
The capital of a public corporation is provided by the Government or by agencies controlled by the Government. However, many public corporation have also begun to raise money from the capital market.
(iv) Financial Autonomy:
A public corporation enjoys financial autonomy. It prepares its own budget; and has authority to retain and utilize its earnings for its business.
(v) Management by Board of Directors:
Its management is vested in a Board of Directors, appointed or nominated by the Government. But there is no Governmental interference in the day-to-day working of the corporation.
(vi) Own Staff:
A publication corporation has its own staff; whose appointment, remuneration and service conditions are decided by the corporation itself.
(vii) Service Motive:
The main objective of a public corporation is service-motive; though it is expected to the self-supporting and earn reasonable profits.
(viii) Public Accountability:
A public corporation has to submit its annual report on its working. Its accounts are audited by the Comptroller and Auditor General of India. Annual report and audited accounts of a public corporation are presented to the Parliament or State Legislature, which is entitled to discuss these.
Advantages of Public Corporation:
Following are the advantages of a Public Corporation:
(i) Bold Management due to Operational Autonomy:
A public corporation enjoys internal operational autonomy; as it is free from Governmental control. It can, therefore, run in a business like manner. Management can take bold decisions involving experimentation in its lines of activities, taking advantage of business situations.
(ii) Legislative Control:
Affairs of a public corporation are subject to scrutiny by committees of Parliament or State Legislature. The press also keeps a watchful eye on the working of a public corporation. This keeps a check on the unhealthy practices on the part of the management of the public corporation.
(iii) Qualified and contented staff:
Public corporation offers attractive service condition to its staff. As such it is able to attract qualified staff. Because of qualified and contended staff, industrial relations problems are not much severe. Staff has a motivation to work hard for the corporation.
(iv) Tailor-Made Statute:
The special Act, by which a public corporation is created, can be tailor-made to meet the specific needs of the public corporation; so that the corporation can function in the best manner to achieve its objectives.
(v) Not Affected by Political Changes:
Being a distinct legal entity, a public corporation is mot much affected by politics changes. It can maintain continuity of policy and operation.
(vi) Lesser Likelihood of Exploitation:
Board of Directors of a public corporation consists of representative of various interest group like labour, consumers etc. nominated by the Government. As such, there is lessor likelihood of exploitation of any class of society, by the public corporation.
(vii) Reasonable Pricing Policy :
A public corporation follows a reasonable pricing policy, based on cost benefit analysis. Hence, public are generally satisfied with the provision of goods and services, by the public corporation.
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