Public Sector Undertakings and Global Enterprises

PSEs are accountable to the general public through Parliamentary control

Step 1: Public Accountability is one of the key characteristics of Public Sector Enterprises. Step 2: Unlike private companies that are accountable to their shareholders, PSEs use public funds. Step 3: Therefore, they must be answerable to the general public. Step 4: This accountability is carried out through Parliamentary control — their performance, budgets, and activities can be discussed and questioned in Parliament. Step 5: They are not accountable only to the PM or just to shareholders — they are accountable to the entire public through their elected representatives in Parliament.

They are subject to red-tapism and delayed decision-making

Step 1: Red-tapism refers to excessive bureaucratic rules and procedures that slow down decision-making. Step 2: Departmental Undertakings are directly controlled by the government and follow strict rules and regulations. Step 3: This causes too much centralisation of control, resulting in rigidity and delays. Step 4: Political considerations and strict adherence to rules further slow down decisions. Step 5: The other options are incorrect — departmental undertakings have very little autonomy (not too much), they enjoy sovereign immunity (making them harder to sue), and they get funds from the

Industrial Policy Resolution of 1956

Step 1: After India's independence, the government needed a clear policy to guide industrial development. Step 2: The Industrial Policy Resolution of 1956 was a landmark document that gave a major role to the public sector. Step 3: India's first Prime Minister, Jawaharlal Nehru, described PSEs as 'new temples of India' and said they would occupy the commanding heights of the national economy. Step 4: This resolution categorized industries into those exclusively for the public sector, mixed sector, and private sector. Step 5: The New Economic Policy of 1991 came much later and actually led to l

Life Insurance Corporation of India (LIC)

Step 1: A Statutory Corporation is created by a Special Act of Parliament. Step 2: LIC was created by the Life Insurance Corporation Act, 1956 — a special act of Parliament. Step 3: Indian Railways is a Departmental Undertaking under the Ministry of Railways. Step 4: Maruti Udyog Ltd. is a Government Company registered under the Companies Act. Step 5: Hindustan Aeronautics Limited (HAL) is also a Government Company. Therefore, LIC is the only correct example of a Statutory Corporation among the options.