Features Of Departmental Undertaking

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. Flexibility
Departmental undertaking 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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