BUSINESS STUDIES MASTER

Unit 3: Public, Private and Global Enterprises

Ownership defines the nature of an enterprise. In India, we have a Mixed Economy where both private and public sectors coexist.

1. Public vs. Private Sector

• Private Sector: Owned and managed by individuals or a group of individuals (e.g., Reliance, Tata).
• Public Sector: Owned, managed, and controlled by the Central or State Government (e.g., Indian Railways, SAIL).

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2. Forms of Public Sector Enterprises

A. Departmental Undertakings

Established as a department of the ministry; it has no separate legal existence.

🧠 Acronym: "A-R-C" (Merits)

• Accountability: High degree of control by the Parliament.
• Revenue: Earnings go directly to the Government Treasury.
• Control: Effective for sensitive areas like Defense.

Example: Indian Railways, Post & Telegraph.

B. Statutory Corporations

An "Artificial Person" created by a Special Act of Parliament which defines its powers and functions.

• Features: Separate legal entity, independent financing, autonomous management.
• Limitations: Political interference in major decisions and rigidity in changing laws.

Example: LIC (Life Insurance Corporation), RBI, SBI.

C. Government Company

Any company where at least 51% of the paid-up capital is held by the Government.

• Features: Registered under the Companies Act 2013; Shares held by the President of India.
• Merits: High flexibility and free from departmental "Red Tapism."

Example: SAIL (Steel Authority of India), BHEL, ONGC.

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3. Global Enterprises (MNCs)

Large corporations which operate in several countries from their headquarters in one home country.

🧠 Acronym: "G-I-A-N-T" (Features)

• Giant Size: Massive assets and sales turnover.
• International: Operates across borders.
• Advanced Tech: Uses superior production techniques.
• Network: Broad marketing and distribution web.
• Territory: Controls multiple markets.

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4. Joint Ventures & PPP

Joint Venture (JV)

When two independent firms join for a specific purpose and shared profit. Example: Maruti-Suzuki.

Public-Private Partnership (PPP)

A long-term contract between a private firm and a government agency for a public project (like highways or metros). Example: Delhi Metro (DMRC).

Prepared by Rathin Kumar Bardhan | Business Studies Master