What is a public corporation?
“A public corporation is not dependent on the state exchequer for its day-to-day financial needs. It’s free to raise the capital, as the legislature is not involved in the process of formulating their budget. ”
A public corporation is a separate legal entity created for a specific purpose. The government finances these corporations in most of the cases although there may be some variations according to the laws prevailing in different countries. In some cases private capital can also be associated, but the government holds 51 % of the share at any rate.
A public corporation is not dependent on the state exchequer for its day-to-day financial needs. It’s free to raise the capital, as the legislature is not involved in the process of formulating their budget. The government appoints the management of the corporation, which is generally a board comprising of serving as well as retired government officials and persons of repute.
The motive of a public corporation is to provide services to the public at a reasonable price. The recruitment policy of such corporations is more or less on the commercial lines and the employees appointed by them can be called as really their own.
They have internal freedom as they can devise their own policies and programs and can decide their own line of action. As is common with the business world, flexibility is greatly required to meet the need of the times. Such flexibility is also a hallmark of these corporations, which try their level best to work like a big business house of repute.
Management is given much autonomy and is made free from various kinds of government and political interference. After all, the corporation is there to show results and not to cater to the vote bank or other such political considerations.
The management is free to take decisions in the interest of the organization. All the important positions are given to well qualified and capable individuals. They also earn profits like private organizations. It helps these undertakings to finance their schemes and undertakes expansion plans.
Though their budget is not a legislative mater, these corporations are responsible to the legislature for their performance. The try to increase their efficiency, lest they should be criticized in the parliament. So, we can say that corporations are such undertakings that are under indirect government control.
Author - DeeKay
Tags - Finance, Economy
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