What is a Public Corporation? Why are Public Corporation set up?
Public Corporation is a body corporate created by an Act of Parliament or Legislature. Its name is notified in the official gazette of the Central or State Government. It is an artificial person with the flexibility of the private sector and the powers of the government. They are set up with the objective of carrying out a specific type of commercial activity. The powers and functions of public corporations are well defined and they are financially independent. These organizations are formed for administering nationalized industries or undertakings. Many service organizations of the government are set up in the form of corporations.
Examples of Public Corporation
LIC, Food Corporation of India (FCI), ONGC, Air India, Indian Airlines, State Bank of India, Reserve Bank of India, Employees State Insurance Corporation, Central Warehousing Corporation, Damodhar Valley Corporation, National Textile Corporation, Industrial Finance Corporation of India (IFCI), Unit Trust of India (UTI), Tourism Corporation of India, Minerals and Metals Trading Corporation (MMTC) etc are some of the examples of Public Corporations.
Definitions of Public Corporation
In the words of Prof. Robson,
“the public corporation is the most important invention of the twentieth century in the sphere of government institutions. It is to be found in one form or another in many different countries all over the world. Public authorities enjoying various degrees of autonomy have existed for centuries; but the public corporation of today has special characteristics which distinguishes it from older bodies. It was specially devised as an organ of public enterprise and it has become the chosen instrument for this purpose in many lands.”
Features of Public Corporation
1. It is a statutory corporation.
2. It is formed and operated basically with a service motive. Profits are only a secondary consideration.
3. It is under State ownership. The day to day decisions are taken by the management of the corporation whereas major policy decisions are taken by the government.
4. It enjoys immunity from parliamentary inquiry into its day-to-day working as distinct from matters of policy.
5. It is a corporate entity.
6. It enjoys perpetual succession.
7. It has the power to acquire, hold or dispose of property.
8. It can sue and be sued in its own name.
9. It is created with a corpus or capital fund. All receipts are credited to the fund and payments are made from it. It can generate its own funds from its operating surplus and market borrowings.
10. The employees are not civil servants but may be on deputation from the government.