Meaning and Features of Departmental Undertaking
Department form of organisation of managing state enterprises is the oldest form of organisation. In those days, no distinction was made between the routine functions of the Government and that of the public enterprises. Therefore, most of the early state owned enterprises were the best examples of the departmental form of organisation.Under departmental form of organisation, a public enterprise is run as a separate full-fledged ministry or as a major sub-division of a department of the Government.
For example, the Indian Railways are managed by the Ministry of Railways. Post and Telegraph services are run as a department, under the Ministry of Communication. The Delhi Milk Scheme, All India Radio, Doordarshan are other examples of departmental undertakings.
The salient features of a departmental undertaking are as follows:
The ultimate responsibility for the management of a departmental undertaking lies with the minister concerned; who is responsible to the Parliament or State Legislature for the affairs of the departmental undertaking. The minister, in turn, delegates his authority downwards to various other management levels, in the departmental undertaking.
The departmental undertaking is financed through annual budget appropriations by the Parliament or the State Legislature. The revenues of the undertaking are paid into the government treasury.
The departmental undertaking is subject to the normal budgeting, accounting and audit procedures, which are applicable to all Government departments.
The departmental undertaking is managed by civil servants, who are subject to same service conditions as applicable to civil servants of the Government.
A departmental undertaking cannot be sued anybody, without the consent of the Government.