CLASS XI: CHAPTER 3 QUESTION BANK
Private, Public & Global Enterprises | 10 Practice Sets (CBSE)
📌 General Instructions for All Sets:
- Maximum Marks: 25 | Time Allowed: 45 Minutes
- Questions 1-5 are objective type carrying 1 mark each (MCQs & Assertion-Reasoning).
- Questions 6-7 are short answer type carrying 3 marks each (30-40 words).
- Questions 8-9 are short answer type carrying 4 marks each (50-80 words).
- Question 10 is a long answer type carrying 6 marks (100-150 words).
- Strictly adhere to the CBSE Competency/Case-Based format.
📄 PRACTICE PAPER - SET 1 (Level: Easy - Fundamental Concepts)
SECTION A (1 Mark Each)
1. Enterprises which are owned, managed, and controlled by private individuals are known as:
[Case-Based] An organization is established as a department of the ministry and is considered a part or an extension of the government itself.
2. This refers to a:3. The primary objective of public sector enterprises is generally:
4. Assertion (A): Indian Railways is a Departmental Undertaking.
Reason (R): It is financed directly from the government treasury and its employees are civil servants.
Reason (R): It is financed directly from the government treasury and its employees are civil servants.
5. Assertion (A): Private sector enterprises are driven by the motive of social service.
Reason (R): Private individuals invest their capital bearing massive risks solely to help the poor.
Reason (R): Private individuals invest their capital bearing massive risks solely to help the poor.
SECTION B (3 Marks Each)
6. Differentiate between Private Sector and Public Sector on the basis of: (a) Ownership, (b) Objective, and (c) Management.
[Case-Based] The post office in your locality is managed by the Ministry of Communications. Its revenue is deposited directly into the treasury of the government.
7. Identify the form of public enterprise. State two of its merits.
SECTION C (4 Marks Each)
8. Explain the term 'Statutory Corporation'. Give two examples of such corporations in India.
[Case-Based] A government hospital and a private corporate hospital are operating in the same city. The government hospital charges ₹10 for an OPD visit, while the private hospital charges ₹1,000.
9. Identify the sectors to which these two hospitals belong. Explain any three differences in their functioning based on accountability and funding.
SECTION D (6 Marks Each)
[Case-Based] The Defense Ministry of India needs to produce highly classified weapons and ammunition. The minister wants absolute control over the manufacturing facilities. He insists that the factories must be strictly funded by the government's annual budget, their accounting must be fully auditable by the Comptroller and Auditor General (CAG) of India, and the factory workers should be strictly considered government employees (civil servants) so that no sensitive information leaks to private parties. The minister completely rejects the idea of creating a separate autonomous company for this purpose.
10. Based on the minister's strict requirements, identify the **form of public sector enterprise** most suitable for manufacturing defense weapons. By quoting lines from the paragraph, explain **four specific features** of this form of enterprise.
📄 PRACTICE PAPER - SET 2 (Level: Moderate - Application & Analysis)
SECTION A (1 Mark Each)
1. Which of the following public enterprises is established by a Special Act of the Parliament or State Legislature?
[Case-Based] A company in which at least 51% of the paid-up share capital is held by the Central Government, or by any State Government, is called a:
2.
3. Life Insurance Corporation (LIC) of India is an example of a:
4. Assertion (A): A Statutory Corporation has financial autonomy.
Reason (R): It is not subject to the same accounting and audit procedures applicable to government departments, and it can borrow money from the public.
Reason (R): It is not subject to the same accounting and audit procedures applicable to government departments, and it can borrow money from the public.
5. Assertion (A): Departmental Undertakings have maximum operational flexibility.
Reason (R): Because they are managed by civil servants and ministers, they can easily take quick, independent business decisions without political interference.
Reason (R): Because they are managed by civil servants and ministers, they can easily take quick, independent business decisions without political interference.
SECTION B (3 Marks Each)
6. Differentiate between 'Departmental Undertaking' and 'Statutory Corporation' on the basis of: (a) Legal Status, (b) Funding, and (c) Flexibility.
[Case-Based] The Government of India holds 55% of the shares in 'Bharat Heavy Electricals Limited' (BHEL), while the remaining 45% is held by the general public.
7. Identify the form of public sector enterprise. State two of its advantages.
SECTION C (4 Marks Each)
8. Explain any four features of a 'Government Company'.
[Case-Based] Despite massive public funding, a departmental undertaking like the Post Office often struggles to compete with private courier services due to red-tapism and delayed decisions.
9. Identify and explain any three limitations of a Departmental Undertaking highlighted or implied in this scenario.
SECTION D (6 Marks Each)
[Case-Based] The Parliament of India passed a specific law to create a massive financial institution called the 'Reserve Bank of India' (RBI) to regulate the banking sector. The Act clearly defined the RBI's exact powers, objects, and privileges. The institution was given a separate corporate existence, meaning it could buy property in its own name and independently hire professionals (who are not civil servants) to manage its operations. It was also granted financial autonomy, meaning it doesn't have to rely completely on the central budget for its daily operations. However, because its actions affect the entire nation's economy, it remains ultimately answerable to the Parliament.
10. Identify the **form of public sector enterprise** representing the RBI. By quoting lines from the paragraph, identify and explain **four specific features** of this form of enterprise.
📄 PRACTICE PAPER - SET 3 (Level: Moderate-High - Nuanced Competency)
SECTION A (1 Mark Each)
1. Which of the following is registered under the Companies Act, 2013?
[Case-Based] When two or more independent business entities agree to join together for a common purpose and mutual benefit, sharing capital and risk, it is called a:
2.
3. Multinational Corporations (MNCs) are characterized by:
4. Assertion (A): A Government Company has a separate legal entity.
Reason (R): It is formed under the Companies Act and can sue or be sued in a court of law in its own name, distinct from the government.
Reason (R): It is formed under the Companies Act and can sue or be sued in a court of law in its own name, distinct from the government.
5. Assertion (A): Global enterprises lack advanced technology.
Reason (R): They operate in developing nations where technology is scarce, so they rely solely on manual labor.
Reason (R): They operate in developing nations where technology is scarce, so they rely solely on manual labor.
SECTION B (3 Marks Each)
6. State any three reasons why a company would enter into a 'Joint Venture'.
[Case-Based] An Indian automobile manufacturer and a Japanese technology firm signed an agreement to jointly manufacture hybrid cars in India. They formed a new company contributing equal capital.
7. Identify the concept. State two benefits the Indian firm will gain from the Japanese firm.
SECTION C (4 Marks Each)
8. Differentiate between a 'Statutory Corporation' and a 'Government Company' on the basis of: (a) Formation, (b) Ownership, (c) Governing Act, and (d) Legal Status.
[Case-Based] A massive foreign company enters the Indian market. It has branches in 50 countries. It launches highly aggressive marketing campaigns and utilizes state-of-the-art robotics in its Indian factory.
9. Identify the type of enterprise. Explain any three specific features of this type of enterprise.
SECTION D (6 Marks Each)
[Case-Based] 'Steel Authority of India Limited' (SAIL) is a major player in the Indian market. It was established by registering under the Companies Act. The President of India holds 65% of the total paid-up share capital, and the rest is traded on the stock exchange by private investors. The company operates autonomously in the market, competing with private steel giants like Tata Steel. It has its own independent Board of Directors, and its employees are not considered civil servants. However, because it uses public money, its annual reports must be presented in the Parliament.
10. Identify the **form of public sector enterprise** SAIL represents. By quoting lines from the paragraph, identify and explain **four specific features** of this form of enterprise.
📄 PRACTICE PAPER - SET 4 (Level: Hard - Analytical Competency)
SECTION A (1 Mark Each)
1. Which of the following is a classic example of a 'Public-Private Partnership' (PPP) in India?
[Case-Based] The government sells 15% of its equity shares in a public sector undertaking to private investors to raise funds and improve efficiency.
2. This process is known as:3. Global Enterprises (MNCs) generally exert massive economic power globally because of their:
4. Assertion (A): Under PPP, the risk is entirely borne by the private sector.
Reason (R): Public-Private Partnership is a contract between the government and a private party where the private party provides a public service, and both sides share the risks and rewards.
Reason (R): Public-Private Partnership is a contract between the government and a private party where the private party provides a public service, and both sides share the risks and rewards.
5. Assertion (A): A Statutory Corporation is free from political interference.
Reason (R): Though legally autonomous, practically, major decisions in a statutory corporation are heavily influenced by the government and politicians.
Reason (R): Though legally autonomous, practically, major decisions in a statutory corporation are heavily influenced by the government and politicians.
SECTION B (3 Marks Each)
6. Explain the concept of 'Public-Private Partnership' (PPP). State one major advantage.
[Case-Based] The government realized that many of its public sector units (PSUs) were sick and constantly losing money. It decided to reduce its ownership stake in these PSUs and invite private management.
7. Identify the policy implemented by the government. State two reasons why the government adopts this policy.
SECTION C (4 Marks Each)
8. Explain the term 'Disinvestment'. Why is the government actively pursuing disinvestment in the public sector today? (Give three reasons).
[Case-Based] 'Alpha Motors' (India) and 'Zeta Tech' (USA) formed a Joint Venture. Alpha provided local market knowledge, while Zeta provided advanced robotics.
9. Based on this case, explain any four benefits of a Joint Venture.
SECTION D (6 Marks Each)
[Case-Based] A colossal foreign company, 'TechGlobal', wants to expand into India. Instead of starting from scratch, it decides to form an alliance with 'IndoTech', an established local Indian firm. 'TechGlobal' brings in ₹10,000 Crores of funding and state-of-the-art AI technology that is not available in India. In return, 'IndoTech' provides its vast existing distribution network across 500 Indian cities and an established, trusted brand name. By combining forces, they easily wipe out smaller competitors in the market and rapidly launch three new software products within a year.
10. Identify the **business arrangement** entered into by 'TechGlobal' and 'IndoTech'. By quoting lines from the paragraph, explain **four specific benefits** the companies derived from this arrangement.
📄 PRACTICE PAPER - SET 5 (Level: Advanced - Evaluation Competency)
SECTION A (1 Mark Each)
[Case-Based] The government sets up a special board to review sick public sector enterprises and decide whether to revive them or shut them down completely.
1. This board was historically known as:2. Which of the following lacks a separate legal entity distinct from the government?
[Case-Based] A large Global Enterprise standardizes its products worldwide but slightly alters its advertising to suit the cultural sensitivities of different countries.
3. This highlights their capability in:4. Assertion (A): Government Companies enjoy maximum freedom from government interference.
Reason (R): Since the government owns 51% or more shares, the government dictates all major policies and appoints the majority of directors, leading to significant political interference.
Reason (R): Since the government owns 51% or more shares, the government dictates all major policies and appoints the majority of directors, leading to significant political interference.
5. Assertion (A): PPP projects are usually undertaken for high-priority public infrastructure like highways and airports.
Reason (R): The government lacks the massive funds and technological expertise required for such mega-projects, which the private sector can efficiently provide.
Reason (R): The government lacks the massive funds and technological expertise required for such mega-projects, which the private sector can efficiently provide.
SECTION B (3 Marks Each)
6. Outline the changing role of the public sector since the 1991 economic reforms in India. (Give three points).
[Case-Based] A massive infrastructure project to build a sea-link bridge was announced. The government provided the land and legal clearances, while a private construction firm provided the capital, engineering expertise, and operational management.
7. Identify the model of project execution. State two reasons why the government prefers this model for infrastructure.
SECTION C (4 Marks Each)
8. "Global Enterprises (MNCs) are a mixed blessing for developing countries." Explain any four features of MNCs to justify their immense power.
[Case-Based] A public sector undertaking was making heavy losses for a decade. The government finally decided to sell 100% of its equity to a private corporation and completely exit the business.
9. Identify the process. What are the main objectives behind the government taking such a drastic step? (Give three objectives).
SECTION D (6 Marks Each)
[Case-Based] Mr. Sharma is an IAS officer. He was recently appointed as the head of a major organization. This organization provides highly essential public utility services (water supply). It is strictly funded through the annual state budget, and any revenue it generates goes directly into the state treasury. Mr. Sharma cannot hire private technical experts; he must rely solely on government-recruited civil servants. Furthermore, he cannot take any quick decisions during emergencies because every file must be approved by the minister, leading to massive delays and red-tapism.
10. Identify the **form of public enterprise** Mr. Sharma is heading. By quoting lines from the case, explain **two features** and **two limitations** of this specific form of enterprise.
📄 PRACTICE PAPER - SET 6 (Level: Expert - Complex Case Studies)
SECTION A (1 Mark Each)
[Case-Based] Which of the following is considered a major limitation of a Statutory Corporation despite having legal autonomy?
1.
2. The term "Memorandum of Understanding" (MoU) in the context of the public sector refers to:
3. Assertion (A): Global Enterprises prefer to operate through centralized control.
Reason (R): The headquarters located in the home country exercises broad strategic control over all its branches and subsidiaries worldwide to maintain uniformity.
Reason (R): The headquarters located in the home country exercises broad strategic control over all its branches and subsidiaries worldwide to maintain uniformity.
4. Assertion (A): A Government Company is not subject to the audit of the Comptroller and Auditor General (CAG) of India.
Reason (R): A Government Company is audited solely by private chartered accountants appointed by the shareholders.
Reason (R): A Government Company is audited solely by private chartered accountants appointed by the shareholders.
5. Which form of public enterprise is most suitable when national security is the paramount concern?
SECTION B (3 Marks Each)
6. Explain the role of the 'Board for Industrial and Financial Reconstruction (BIFR)' regarding sick public sector units.
[Case-Based] The government owns 49% of the shares in 'Zeta Telecom Ltd.', while private investors own 51%. The government appoints 4 directors, and private investors appoint 5.
7. Is 'Zeta Telecom Ltd.' a Government Company? Justify your answer using the legal definition under the Companies Act.
SECTION C (4 Marks Each)
8. Compare 'Departmental Undertaking' and 'Government Company' on the basis of: (a) Accountability, (b) Autonomy, (c) Employees, and (d) Audit.
[Case-Based] A massive multinational corporation (MNC) enters a small developing country. It easily crushes local competitors using its massive financial power and aggressive advertising.
9. Identify two features of an MNC highlighted here. State two potential dangers such MNCs pose to the host country's economy.
SECTION D (6 Marks Each)
[Case-Based] The Government of India wanted to build an ultra-modern airport in a metro city. They realized that government departments are notorious for delays and lack the cutting-edge technology required. Therefore, the government partnered with a leading private infrastructure company. Under the contract, the government provided the land and streamlined the legal approvals. The private company brought in ₹10,000 Crores, designed the airport, and agreed to manage its operations for the next 30 years, sharing a percentage of the profits with the government. This ensured the project was completed on time, with world-class facilities, and without draining the public treasury.
10. Identify the **model of enterprise** described in the case. By quoting lines from the paragraph, explain **four specific advantages** of this model that led to the successful completion of the airport.
📄 PRACTICE PAPER - SET 7 (Level: Expert - Integrated Concepts)
SECTION A (1 Mark Each)
[Case-Based] A public sector unit (PSU) was granted Navratna status by the government.
1. This status essentially gives the PSU:2. Which of the following is NOT a feature of a Joint Venture?
3. Assertion (A): Global enterprises often form joint ventures with local companies in host countries.
Reason (R): Joint ventures help the global enterprise bypass legal restrictions, gain instant access to the local distribution network, and understand local cultural nuances.
Reason (R): Joint ventures help the global enterprise bypass legal restrictions, gain instant access to the local distribution network, and understand local cultural nuances.
4. Assertion (A): A Statutory Corporation can borrow money from the general public.
Reason (R): It enjoys financial autonomy and is not solely dependent on the government budget for its capital requirements.
Reason (R): It enjoys financial autonomy and is not solely dependent on the government budget for its capital requirements.
5. The primary motive of a private sector enterprise is _______, while the primary motive of a public sector enterprise is _______.
SECTION B (3 Marks Each)
6. Explain the term 'Disinvestment'. Why is it heavily criticized by some trade unions?
[Case-Based] The 'Food Corporation of India' (FCI) is established by a special Act of Parliament to ensure food security. It has its own independent financial structure and rules.
7. Identify the form of public enterprise. State two of its main features.
SECTION C (4 Marks Each)
8. Explain any four reasons why companies enter into 'Joint Ventures'.
[Case-Based] The government reduced the number of industries exclusively reserved for the public sector from 17 to just 3 (Atomic Energy, Arms, and Railway transport).
9. Identify the economic policy shift highlighted here. Explain three reasons why the government reduced the public sector's role.
SECTION D (6 Marks Each)
[Case-Based] 'Alpha Energy' is a massive power generation company. The central government holds 60% of its paid-up share capital, and the remaining 40% is held by retail investors. The company competes directly in the open market against private power companies like Tata Power. To stay competitive, 'Alpha Energy' formed a partnership with a Japanese technology giant to jointly build a new, highly efficient solar plant in India. The Japanese firm provided the advanced solar panels, and 'Alpha Energy' provided the land and local government approvals. They agreed to share the profits from the new plant equally.
10. Answer the following based on the case:(a) Identify the exact **form of public sector enterprise** of 'Alpha Energy'. Give a reason.
(b) Identify the **business strategy/arrangement** 'Alpha Energy' entered into with the Japanese firm.
(c) Explain **four benefits** that 'Alpha Energy' and the Japanese firm derived from this specific arrangement.
📄 PRACTICE PAPER - SET 8 (Level: Advanced Board Mock 1)
SECTION A (1 Mark Each)
1. Which of the following statements about a Government Company is FALSE?
[Case-Based] A company operates in 40 different countries. It centralizes its research and development (R&D) in the USA but decentralizes its manufacturing across Asia to take advantage of cheap labor.
2. This company is a:3. Assertion (A): Departmental undertakings are immune from legal suits.
Reason (R): Since they are a direct arm of the government, they cannot be sued by private individuals without the strict consent of the government.
Reason (R): Since they are a direct arm of the government, they cannot be sued by private individuals without the strict consent of the government.
4. Assertion (A): Statutory Corporations suffer from inflexibility.
Reason (R): Their objectives and powers are rigidly defined by the Act of Parliament. Any change requires a time-consuming amendment to the Act by the Parliament.
Reason (R): Their objectives and powers are rigidly defined by the Act of Parliament. Any change requires a time-consuming amendment to the Act by the Parliament.
5. In a Public-Private Partnership (PPP), the main role of the public sector (government) is typically to:
SECTION B (3 Marks Each)
6. Differentiate between 'Private Sector' and 'Joint Sector' enterprises.
[Case-Based] The management of 'Zeta Airlines' (a 100% government-owned company) is highly inefficient. The government decides to sell 40% of its shares to private institutional investors on the stock market.
7. Identify the process. Will 'Zeta Airlines' still remain a Government Company after this sale? Give a reason.
SECTION C (4 Marks Each)
8. Explain any four merits of a 'Statutory Corporation'.
9. "MNCs play a vital role in the economic development of a country." Justify this statement by giving four arguments in favor of MNCs.
SECTION D (6 Marks Each)
[Case-Based] After India's independence, the government realized that private businessmen did not have the massive capital required to build steel plants, dams, and heavy machinery factories. Therefore, the government took the lead and established massive Public Sector Enterprises to build the core infrastructure of the country. These enterprises generated thousands of jobs in backward areas, thereby reducing regional imbalances. Furthermore, the profits earned by these enterprises were used by the government for further public welfare rather than filling the pockets of a few wealthy private individuals, preventing the concentration of economic power.
10. By quoting lines from the paragraph, identify and explain the **four key roles/objectives** of the Public Sector in the economic development of India during the post-independence era.
📄 PRACTICE PAPER - SET 9 (Level: Advanced Board Mock 2)
SECTION A (1 Mark Each)
[Case-Based] A public sector unit was constantly making losses and draining taxpayers' money. The government handed it over to a special board to decide its future.
1. Which board was responsible for this task?2. Which of the following is considered the biggest disadvantage of a Departmental Undertaking?
3. Assertion (A): Government companies are free from parliamentary control.
Reason (R): The annual reports of government companies are completely confidential and are never presented before the Parliament or State Legislature.
Reason (R): The annual reports of government companies are completely confidential and are never presented before the Parliament or State Legislature.
4. Assertion (A): Joint ventures help in risk sharing.
Reason (R): When two companies join hands to execute a massive, high-cost project, the financial burden and the potential risk of failure are divided between them.
Reason (R): When two companies join hands to execute a massive, high-cost project, the financial burden and the potential risk of failure are divided between them.
5. The primary reason governments engage in Public-Private Partnerships (PPP) is to:
SECTION B (3 Marks Each)
6. State three features of a 'Departmental Undertaking'.
[Case-Based] A local Indian beverage company is struggling to compete. It forms a Joint Venture with a massive American beverage giant.
7. State any three specific benefits the local Indian company will immediately gain from this Joint Venture.
SECTION C (4 Marks Each)
8. Explain any four limitations of 'Multinational Corporations' (MNCs) from the perspective of the host country.
9. Explain the term 'Government Company'. Why is it considered the most flexible form of public enterprise compared to Departmental Undertakings and Statutory Corporations?
SECTION D (6 Marks Each)
[Case-Based] After the economic reforms of 1991, the Government of India realized that the public sector could no longer be treated as a sacred cow. The government implemented four massive policy changes. First, it drastically reduced the number of industries exclusively reserved for the public sector. Second, it started selling its shares in public sector units to private investors to raise funds. Third, it brought all chronically sick and loss-making public units under the scrutiny of the BIFR. Fourth, to make the profitable public sector units even more competitive globally, the government granted them special operational and financial autonomy by categorizing them as 'Navratnas' and 'Miniratnas'.
10. By quoting lines from the paragraph, identify and explain the **four major policy shifts** undertaken by the Government of India regarding the Public Sector since 1991.
📄 PRACTICE PAPER - SET 10 (Level: Ultimate Board Challenger)
SECTION A (1 Mark Each)
1. Which form of public enterprise is audited by the Comptroller and Auditor General (CAG) of India?
[Case-Based] A company operates in multiple countries. It completely dominates the market due to its massive financial strength and ability to hire the best managerial talent globally.
2. This is a description of a:3. Assertion (A): A Government Company avoids rigid parliamentary control over its day-to-day operations.
Reason (R): Being registered under the Companies Act, it enjoys operational autonomy like any other private company, though it is ultimately accountable through annual reports.
Reason (R): Being registered under the Companies Act, it enjoys operational autonomy like any other private company, though it is ultimately accountable through annual reports.
4. Assertion (A): Statutory Corporations are funded entirely by private shareholders.
Reason (R): A statutory corporation raises its initial capital strictly from the government, but it has the power to borrow from the public or retain its earnings.
Reason (R): A statutory corporation raises its initial capital strictly from the government, but it has the power to borrow from the public or retain its earnings.
5. The main objective of forming a 'Joint Venture' is to:
SECTION B (3 Marks Each)
6. Differentiate between 'Departmental Undertaking' and 'Government Company' on the basis of: (a) Formation, and (b) Staff/Employees.
[Case-Based] The Government wishes to construct a massive hydro-electric dam. It invites a private engineering giant to execute the project. The government guarantees to purchase the electricity produced, while the private firm builds and operates the dam.
7. Identify the model. State two reasons why the private sector participates in such government projects.
SECTION C (4 Marks Each)
8. Explain any four benefits of a 'Joint Venture'.
9. "Statutory Corporations combine the power of the government with the flexibility of a private enterprise." Justify this statement by explaining four features of a Statutory Corporation.
SECTION D (6 Marks Each)
[Case-Based] The Ministry of Information Broadcasting runs the 'Doordarshan' television network. It is entirely funded by the government treasury, and its employees are recruited through civil service exams. Decision-making is extremely slow because every minor budget change requires approval from the Ministry, leading to severe red-tapism. Consequently, Doordarshan struggles to compete with agile private news channels. To fix a similar issue in the aviation sector, the government previously converted 'Air India' into a company registered under the Companies Act, giving it its own Board of Directors and financial autonomy, before finally selling it off.
10. Identify the **form of public enterprise** representing 'Doordarshan' and explain its **three limitations** as highlighted in the case. Identify the **form of public enterprise** representing 'Air India' (before it was sold) and explain **three advantages** it enjoyed over Doordarshan.
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