Demerits

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Demerits

But economists are generally agreed that governmental machinery. in the matter of running a business. compares very unfavorably with private management. The government manager’s tenure is fixed. He gets a fixed annual increment. and will get promotion according to seniority . He cannot, therefore. be expected to show the same degree of initiative or hard. work as the manager of a private company. The latter may receive notice to quit any fine morning. if the management is convinced that he is not doing his best.

The State employee. who has no ambition to rise. can flout the senior officers. At the most, he will be· transferred or his increment stopped if it comes to the worst He does not consider himself the servant of any particular person. but the servant of the impersonal state. and that makes all the difference.

Government-managed enterprise. routine replaces responsibility. There is the tyranny of the deskor red-tape. There are exasperating delays. A paper  has to pass through very many hands. none making any material alteration or improvement.

there are losses nobody seems to bother. There is no counterpart of the shareholders whom the directors have to face every year. The tax -payers are dumb. If there is loss. nobody really feels that it is his loss. Their representatives in the legislature will no doubt raise a hue and cry. yet the government usually has a comfortable majority. and the government caravan congeries to move on.

Forms of Organisation of Public Enterprises

Public enterprises may be organised as (a) Departmental i.e.• run by a Government department e.g. Railway. s and Posts and Telegraph in India (b) Corporation e.g, Life Insurance Corporation of India created by a special Act of Parliament (c) Limited Liability Company registered under the Companies Act.

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