Features Of Departmental Undertaking

Departmental undertaking is formed and managed by government. It has some specific features or characteristics such as government capital, government management and control, flexibility, accountability etc.

Following are the main features of departmental undertaking

1. Formation

Departmental undertaking is created by the government. It is attached to a government ministry. It has no legal status and cannot sue and cannot be sued without government permission. Its motive is to deliver essential goods and services at fair price.

2. Capital

Its capital is provided from government budget. Departmental undertaking cannot issue shares to public. It does not have borrowing power. Its income is deposited in government account.

3. Management and control

Such undertaking is managed by government civil servants. It strictly follows government rules and regulations. It is managed in a bureaucratic way. It is controlled by government according to existing legal provisions.

4. Lack Of Flexibility

Lack of flexibility is another key feature of departmental undertaking. It has no flexibility in internal operations. It must follow government directions and procedures.

5. Staffing

Departmental undertaking is staffed by civil servants. They employees are recruited by Public Service Commission. Their terms and conditions are as per government rules.

6. Public accountability

Departmental undertaking is accountable to public through parliament. The auditor general audits its accounts and reports its performance. The parliament discuss its performance.


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