Ways Public Corporation are Controlled

The following methods are the ways use by government to exercise control over public corporation.

  • Government exercise control through the appointment of members of the board of Governors or directors and can remove them.
  • The government has the power to give to the corporation direction or instruction on matter of general policy. If the corporation fails to carry out the instruction or directives given by the government, it can supersede the board and appoint a new board.
  • Government approval is necessary in case of some of the corporation for their schemes and programmes
  • Capital investment and borrowing by the corporation requires government approval.
  • The account of the corporation have to be kept in a form settled in consultation with the government or the auditor-general and the audit of the account is usually by auditor appointed by the government or by the auditor-general himself.
  • The government has the necessary power to obtain the necessary information from the corporations which are required to submit to the government periodical statement, accounts, returns, annual financial estimates, programmes and annual reports on their activities and working. 

Methods of Parliamentary Control over Public Corporation

  • Enactment  of the corporation act
  • Continuous control through parliamentary committee
  • Discussion on the annual reports of the corporations
  • Half an hour discussion
  • Adjournment motion
  • Budget debate
  • Calling attention of the house to matter of urgent public importance
  • Moving resolution
  • Discussion on the inaugural address from the head of state.

Shortcomings of Public Corporation

The various inquiry committee appointed from time to time have shown that public corporation have not fared well. The main defects are the followings:

  • The board of directors has a preponderance of official member which reduces the corporation to the position of a department of government. The board can hardly be called an autonomous body.
  • The public corporations are autonomous only in name.
  • Personnel policy of the most of the public corporations is not good. They have not evolved effectively and energetic policy to recruit and train suitable persons for the managerial and other skilled jobs.
  • Lack of efficiency and self sufficiency are the other defects. Most of the corporations are running in loss. There is much waste and inefficiency, their progress has been slow.
  • The government should not interfere with the working of autonomous statutory corporations; if they wish to interfere they should not shirk the responsibility of giving directions in writing.


Some of the recommendations are as follows:

  • The management board of corporations should comprise of a full time chairman-cum-managing director, full time functional directors, not more than two part time government representatives and two or three part-time members from outside the government.
  • The government representatives should be selected on the basis of their qualification and experience and not by virtue of the office which they hold in a particular ministry.
  • The bureau of public enterprise should work out a model form for the annual report of public undertakings. It should be strengthened and invested with authority appropriate to its responsibilities.
  • A small technical call should be set up in each ministry concerned with public undertakings to assist in the scrutiny and evolution of feasibility studies and detailed project reports and for the analysis and utilization of project reports and returns received from public undertaking.
  • No officer of the ministry should be made chairman of public undertaking nor should a secretary of ministry be included in its boards of management. Top management post should be filled in by official on deputation only when there is no suitable alternative available.
  • Each undertaking should prepare a comprehensive budget to embrace the entire organizations. Internal audit should be made more effective.
  • A material management manual should be drawn up.
  • Four or five audit board should be constituted, each board dealing with specific sectors of public enterprise.
  • There should be systematic appraisal of the performance of all public undertakings.

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