Page 1 :
Following are the merits of Statutory Corporation:, (1)Formation: Formation of Statutory Corporations is easy. It can be easily formed by passing Special, Act, either at Legislature Assembly or at Parliament., (2) Autonomy: Statutory corporations can have its own working pattern. There is no political, interference in day to day working of corporation., (3) Flexibility: Statutory corporations enjoy full flexibility in its operations. It is free to take any, decision relating to capital collection. Investment, market, production, recruitment, planning,, accounting & the decision once taken can be easily changed., (4)Capital Raising: Government contributes the capital at large for statutory corporations, but, statutory corporations are free to collect capital from general public., (5) Quick Decisions: Quick decisions are possible because all policy decisions are taken by the Board, & board can implement these decisions easily. There is no interference of government in any type of, decisions., (6) Staff Members: Statutory corporations is free to have its own recruitment policy. It can recruit,, promote, and transfer any employee / officer as per its requirement., (7) Economies of Scale: Statutory corporations operates on large scale & enjoy the economies of, large scale operations., (8) Separate Entity: Like joint stock company, statutory corporations enjoys separate legal status., (9) Self Accounting System: Statutory corporations is free to have its own accounting pattern. It need, not follow Budgetary Accounting & Audit Control of government. It is free to prepare its own, budget., (10) Social Welfare: The main object of statutory corporations is to provide necessary services at a, lower price. It works for protecting the interest of common people. Hence society at large is, benefited., Disadvantages Statutory Corporations or Public Corporations, 1. Theoretical Autonomy, The autonomy of a statutory corporation exists on paper only. The fact is that its working is often, interfering with by politicians., 2. Rigid structure, The objects and powers of statutory corporations can't be changed without amending the Act., Amendment is a complicated procedure., 3. Nominated board

Page 2 :
The board of directors of a statutory corporation is appointed by the government. Quite often civil, servants who do not possess required skills and experience in management are appointed., 4. Financial burden:, When a public corporation incurs losses, the government provides subsidies to make good the loss., It is really a burden to the government., 5. Ignore commercial principles, Since public corporation exists largely to serve the public interest and not guided by profit motive,, commercial principles are likely to be ignored in its operations leading to inefficiency, , III. Government Company, A government company is a company in which not less than 51% of the paid up share capital is held, by the central government or state government or jointly by both. In some cases government, holding may be 100%. It is formed and registered under companies Act 1956 (Now it is Companies, Act 2013).The shares of the government in that company are purchased in the name of the, President of the India. Since the government is the major share holder and exercises control over the, management of these companies, they are known as government companies. In India, the largest, number of public enterprises comes under this category., Eg.HMT, ITI, STC, Hindustan Aeronautics Limited ( HAL), IOC, Hindustan Cables Ltd, Ashoka hotels, Ltd, Madras Refineries Ltd., , Features of Government Companies, Formed Under Companies Act, Government companies are established under companies act by the government. They need to, follow the provisions of the Indian companies act. 1956 & 2013 like other companies do. These, companies have separate legal status from their owners. It can buy, own or sell property in his own, name. These companies basically exist to provide service & earn huge profits., Management & Control, Government companies are managed by the government through a board of directors appointed by, them. The majority of directors on the board are appointed by the government., Capital, In government companies at least 51 % of its share capital is provided by the government. The, government may also own 100 % of the company’s capital when it is fully owned by it. In case of, partly owned the remaining portion of capital is provided by a private individual. Liability of, government is limited to its share in the company., Own Staff

Page 3 :
Its employees are not government servants., Financial autonomy, It enjoys borrowing powers. It is not subject to budgetary, accounting and audit controls applicable, to government departments., Accountability, Its annual report is placed before the Parliament or state legislature as the case may be., Funding, The government company obtains its fund from the government share holding and other private, share holders. It can also raise additional funds from the capital market., , Advantages of a Government Company, 1. Easy formation, Government Company is formed and registered under the Indian Companies Act, 1956, either as a, Private company or as a Public company. It does not require any Special Act for its formation., 2. Huge Capital, A government company requires huge capital for its business operations. The company is free to, collect capital through issue of shares & it can even borrow money depending upon its requirement., 3. Professional management, The government company due to huge capital & large size of organization can easily afford to, appoint professional managers resulting in increased efficiency of the company., 4. Flexibility in operations, The objectives, powers and organizational set up of a government company can be easily altered, according to the provision of the Companies Act, without seeking the approval of the parliament., 5. Internal autonomy, A government company can manage its affairs independently. It is relatively free from ministerial, control and political interference, in its day-to-day functioning., 6. Public accountability, The annual report of the Government Company is presented to the Parliament/ State legislature., This ensures public accountability and increases public confidence., 7. Private Participation, Through Government company device, the government can avail of the management skills, technical, know-how and expertise of the private sector and foreign countries. For example, the Hindustan

Page 4 :
Steel Limited has obtained technical and financial assistance from the U.S.S.R., West Germany and, the U.K. for its steel plants at Bhilai, Rourkela and Durgapur., , Disadvantages of a Government Company, 1. Lack of Motivation:, The Directors or other officers of Government company are least interested in operational activities, of a government company. They get fixed remuneration without any share in the profit or without, any responsibility for losses., 2. Political Interference, Government companies are suffering from interference by political parties & political leaders., 3. Lack of Autonomy, Government Company has autonomy in theory, but in practice it has no autonomy because political, parties interfere in the day-to-day operations of the company., 4. Delay in Decision, The government companies have to depend upon the government for deciding policy matters,, resulting in delaying the decisions., 5. Wastage of Resources, There is a good amount of wastage of resources. There is poor material management.Corrupt, officials place huge orders for raw materials & inputs because of bribes & commission, even though, such purchases are not required in large quantities., 6. Low labor productivity, The government companies suffer from the problem of low labor productivity. It is due to faulty, selection, lack of proper training and development, forced transfer etc., 7. Poor labor management relations:, The government companies suffer from the problem of poor labor management relations. This is, due to inefficient management and also due to selfish and militant trade unions.

Page 5 :
Comparison between Different Forms of Public enterprises