Meaning and Features of Departmental Undertaking

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.

Features of Departmental Undertaking

The salient features of a departmental undertaking are as follows:

i. Ultimate Responsibility

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.

ii. Governmental Financing

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.

iii. Accounting and Audit

The departmental undertaking is  subject  to the normal budgeting, accounting and audit procedures, which are applicable to all Government departments.

iv. Managed by Civil Servants

The departmental undertaking is managed by civil servants, who are subject to same service conditions as applicable to civil servants of the Government.

v. Sovereign Immunity

A departmental undertaking cannot  be sued anybody, without the consent of the Government.