Here is an essay on the ‘Types of Public Corporations‘ for class 9, 10, 11 and 12. Find paragraphs, long and short essays on the ‘Types of Public Corporations’ especially written for school and college students.
Essay on Public Corporations
Essay Contents:
- Essay on the Tennessee Valley Authority
- Essay on the British Broadcasting Corporation (B.B.C.)
- Essay on the Damodar Valley Corporation (D.V.C.)
- Essay on the Life Insurance Corporation (L.I.C.)
Essay # 1. Tennessee Valley Authority:
The first important type of public corporation is the Tennessee Valley Authority which was created in America by the Norris Act of 1933 for utilizing the water of Tennessee River for the purpose of planned development of water-shed regions. Regarding composition the Act provided that “there is hereby created a body corporate by the name of the Tennessee Valley Authority…. The Board of Directors first appointed shall be deemed the incorporators, and the incorporation shall be held to have been effected from the date of the first meeting of the Board.”
The Board consists of three members who are nominated by the President and confirmed by the Senate for a period of nine years, one retiring after ever three years.
They can be removed from office only by a concurrent resolution of the two Houses of Congress. In the appointment of officials and the selection of employees for the corporation and in the promotion of such employees, or officials no political test or qualification shall be permitted or given consideration but all such appointments and promotions shall be given and made on the basis of merit and efficiency.
Working:
The TVA has successfully carried out its programme of development of Tennessee Valley. It has built up a very high reputation for itself in matters of efficient management, sound personnel policy and long-term planning.
The Labour Management Committees associated with TVA have not only given the workers a hand in comprehending and solving the problems of the project but also built up a steady process of citizen self-education.
Essay
# 2. The British Broadcasting Corporation (B.B.C.):
In October, 1922, a company called “The British Broadcasting Company” was formed in England to carry out regular wireless transmissions, under license and agreement with the Postmaster-General. Sometimes later it was thought desirable to convert the company into a government corporation with a view to providing the service to the people on more efficient and economical lines.
Consequently a Royal Charter was passed on 20th December, 1926 creating thereby the British Broadcasting Corporation which took over the wireless broadcasting service from the company.
Composition and Working:
The B.B.C. is under a board of seven governors appointed by an Order-in-Council, in other words, by the Government of the day. There is a Director-General of the Board who is the Chief Executive of the Corporation and thus responsible for its good administration.
“The B.B.C. has a dual nature; on the one hand it is a highly technical organization, in which it is closely associated with the engineering experts of the post office, and on the other it is an educational and cultural service over which it has a very wide autonomy. It is subject to general ministerial control, the Postmaster-General being responsible in the House of Commons for finance and broad policy; he has also the power to veto programme but in practice the B.B.C. is given effective independence in operation.”
It derives its main revenues from an assigned percentage of moneys obtained from licenses issued by the Post Office.
Essay
# 3. The Damodar Valley Corporation (D.V.C.):
The Damodar Valley Corporation was created by the Government of India in 1948 for the development of the Damodar Valley in the states provinces of Bihar and West Bengal.
According to the preamble of the D.V.C. Act the functions of the Corporation are “the promotion of the schemes for irrigation, water supply and drainage, generation, transmission and distribution of electric energy, flood control, navigation, afforestation and control of soil erosion and finally the promotion of public health, and the agricultural, industrial, economic and general well-being of the Damodar Valley and its area of operation.”
Thus it is a multipurpose project.
Composition:
The Corporation consists of a Board including one chairman and two members appointed by the Central Government in consultation with the State Governments of West Bengal and Bihar. The Central Government can remove them at any time. The Corporation also has a Financial Adviser, a Secretary, a Deputy Secretary and two Under Secretaries all appointed by the Central Government.
The Corporation has its own funds and finances. All receipts of the Corporation are carried thereto and all payments are made therefrom. The Government of India, and the Governments of Bihar and West Bengal provide the necessary capital.
In case any participating Government fails to provide its share on the prescribed date, the Corporation may raise a loan to make up the deficit at that Government’s cost. The Corporation maintains its own audit system but submits an annual report of its work to the Government which is placed on the table of both the Houses of Parliament.
Working:
The Corporation has the powers to do anything which may be necessary or expedient for the purpose of carrying out its functions under the Act. The Central Government maintains its control only on ‘questions of policy’, otherwise it has full autonomy regarding administrative matters.
On the working of corporation divergent views have been expressed. Some critics have observed that corporations could not work properly because they did not enjoy their autonomy due to too much interference from the Government.
Mr. Gorewala in his report on the Efficient Conduct of State Enterprises, points out, “Recently it has been decided that plans prepared by its chief engineer and approved by its consultant engineers—three specially qualified technical men—are, thereafter, to be further examined by the engineering sections of those participating Governments.”
Besides, the Technical Committee of the participating Governments by scrutinizing the project estimates of the corporation delays the execution of the project. Moreover, in the appointment of officials for the D.V.C., politics has entered in.
In the words of Gorewala, “In a country in which it has long been recognized to be a man’s clear duty to provide for his relatives, near and distant, as well as for his Biradari or brotherhood, very special measures are needed to deal with the many evils and injustices that come from patronage.”
On the other hand, some people hold the view that for satisfactory working of the corporation there should be more of government control.
The Estimates Committee in its Report of 1954 says, “The autonomous character of the DVC has been taken to extreme limits. The DVC has developed strange conceptions of its autonomy and tried to bypass the authority or the advance of the government.” A great deficiency in the DVC set-up is the absence of the labour’s association in the management of the enterprise.
The Act states that “the corporation shall cooperate with the participating governments, railway authorities and local authorities and bodies with a view to m
inimizing inconvenience likely to be caused by the subversion of roads and communications” but it does not lay down that the corporation should give the workers a hand in comprehending and solving the problems of the project.
No effort has so far been made to seek the cooperation of the workers in the working of corporation.
In conclusion, it may be remarked that though DVC has succeeded in achieving some of its targets, e.g., completion of Tilaiya, Konar and Maithan dams, yet it has not come up to the standards set by Tennessee Valley Authority in matters of long-term planning, development programmes and a sound personnel policy.
Essay
# 4. Life Insurance Corporation (L.I.C.):
Before January 19, 1956, the business of life insurance was undertaken by Indian and foreign insurance companies, provident fund societies and the Posts and Telegraphs Department of the Government of India. In addition, certain State Governments also transacted insurance business, both life and general.
On the said date the management of life insurance business was vested in the Central Government through an ordinance.
The Life Insurance Corporation Act, which came into force on July 1, 1956 transferred all the assets and liabilities pertaining to life insurance business of existing insurance companies to a statutory corporation which got the exclusive right to carry on life insurance business.
Composition:
The Corporation was established on September 1, 1956. It is managed by a Board consisting of not more than fifteen members, including the chairman, appointed by Central Government. The members are not to engage themselves in such financial or other dealings as are likely to prejudicially affect the exercise of their functions.
Members are not to take part in deliberations or discussions of the corporation in respect of contracts in which they are directly or indirectly interested.
The general superintendence and direction of the Corporation is entrusted to an Executive Committee, consisting of not more than five members. The Corporation also has an Investment Committee consisting of not more than seven members of whom at least three are the members of the Corporation.
In addition, the Corporation has managing directors and zonal managers. The zonal offices have been divided into divisional and branch offices.
Working:
Since the Corporation took over the life insurance business, it is showing progressive trends. During 1969-70 as many as 16, 22,000 new policies were assured for the sum of 1,303 crores of rupees. Justice Chagla who enquired into the ‘Mundhra Deal’ came to the conclusion that the Government interfered too much in the working of the Corporation.
After reproducing Section 21 of the Life Insurance Corporation, under which the Central Government could give written directions in matters of policy, involving public interest, Mr. Chagla observed, “Section 21 embodies the ideal compromise between the autonomy of a statutory corporation and the control which must be exercised by a welfare State over such a corporation while leaving to the corporation complete autonomy to manage its own day-to-day administration.
While leaving it free to invest its funds in the interest of the policy-holders. Government could only control its discretion when a question of policy involving public interest arose.
Government could not tell the Corporation that it should or should not invest in any particular share, it could not tell the Corporation that it should help a particular industry, much less a particular individual; but it could tell the Corporation that it should invest its funds in certain industries which were essential for the successful working of the Second Five-Year Plan or to give effect to a particular economic or financial policy laid down by Government.
It is most unfortunate that the wise and sound principle laid down in Section 21 has not been followed in the working of the Life Insurance Corporation.
The evidence clearly shows that there was a tendency on the part of the Finance Ministry to look upon the Corporation as a wing or branch of that ministry and to issue orders to it in the belief that the Corporation was bound to carry out those orders….The transaction was not really a transaction effected by the Corporation in the exercise of its statutory duty and discretion.
The evidence is clear beyond doubt that the transaction was brought about as a result of interference by Government and the transaction may be characterised as a dictated transaction.
Defects and Remedies:
The reports of the P. A.C. and the various inquiry committees appointed from time-to-time have shown that public corporations in India have not fared well.
The main defects are the following:
(i) The Board of Directors has a preponderance of official members which reduces the corporation to the position of a department of the government. The Board can hardly be called an autonomous body. These official members have neither the time nor the entrepreneurial skill.
Sometimes, the same person is appointed on a number of Boards. All this retards the work of the Board and causes uncertainty and drift in the policies of the corporation.
(ii) The Public Corporations are autonomous only in name; actually they are regarded as Government departments.
The Estimates Committee of the first Lok Sabha in its sixteenth report observed. “The Committee have noticed that in the relations between these undertakings and the Ministry, the former are treated in the same manner as departments and offices of Government controlled and supervised by the Secretariat. The State undertakings have thus become adjuncts to ministries and are treated more or less on the same lines as any subordinate organisation or office. The Committee deplore this tendency which has had a harmful effect on the productive policy of the undertakings as these have been subjected to all the usual red-tap and procedural delays common to a Government department with serious consequential effect on production.”
What is still worse is that the minister does not issue any directive in writing but tries to influence the Board from the back-door method. In order to save himself from the responsibility, he influences the members of the Board by informal consultations and advice.
That it so happens very usually, was revealed in Chagla’s Inquiry. The Minister may dictate to the Corporation although masquerading it as a mere advice. The Managing Director of LIC stated before the Commission that “when the Finance Secretary asked them to do something, they looked upon it as a directive from Government.”
(iii) In certain respects the Parliamentary criticism is not well informed.
(iv) Personnel policy of most of the public corporations is not good. They have not evolved effective and energetic policy to recruit and train suitable persons for the managerial and other skilled jobs.
(v) Lack of efficiency and self-sufficiency are the other defects. Most of the corporations are running in loss. There is much waste and inefficiency. Their progress has been slow.
Mr. Chagla made the following recommendations for the efficient administration of public corporations:
(i) The Government should not interfere with the working of autonomous statutory corporations; that if they wish to interfere they should not shirk the responsibility of giving directions in writing.
(ii) The chairmen of corporations, like that of the L.I.C., which have to deal with investments in a large way, should be appointed from persons who have business and financial experience and who are familiar with the ways of the stock exchange.
(iii) If the executive officers of the Corporations are to be appointed from the Civil Services, it should be impressed upon them that they owe a duty and lo
yalty to the corporation and that they should not permit themselves to be influenced by senior officials of Government or surrender their judgment to them.
If they feel that they are bound to obey the orders of these officials, they must insist on these orders being in writing.
(iv) In a parliamentary form of government. Parliament must be taken into confidence by the ministers at the earliest stage, and all relevant facts and materials must be placed before it. This would avoid difficulties and embarrassments being caused at a later stage when Parliament gets the necessary information from other sources.”
Recommendations of ARC:
The Administrative Reforms Commissions has made a large number of recommendations for the better management and the increased profitability of the corporations.
Some of these recommendations are as follows:
(i) The Management Board of Corporations should comprise of a full-time Chairman- cum-Managing Director; full-time functional directors; not more than two part-time government representatives; and two or three part-time members from outside the government.
The government representatives should be selected on the basis of their qualifications and experience and not by virtue of the office which they hold in a particular Ministry.
(ii) The Bureau of Public Enterprises should work out a model form for the Annual Report of public undertakings. It should be strengthened and invested with authority appropriate to its responsibilities.
(iii) A small technical cell should be set up in each Ministry concerned with public undertakings to assist in the scrutiny and evolution of feasibility studies and detailed project reports and for the analysis and utilisation of progress reports and returns received from public undertakings.
(iv) No officer of the Ministry should be made chairman of public undertaking nor should a Secretary of Ministry be included in its Board of Management. Top management posts should be filled in by officers on deputation only when there is no suitable alternative available.
(v) Each undertaking should prepare a comprehensive budget to embrace the entire organisation. Internal audit should be made more effective.
(vi) A Material Management Manual should be drawn up.
(vii) Four or five Audit Boards should be constituted, each Board dealing with specified sectors of public enterprise.
(viii) There should be systematic appraisal of the performance of all public undertakings.
Government corporations are destined to play a significant role in the changing world of the future. Due to lack of experience and also due to non-availability of technical staff mistakes might have been made in the past by the Indian corporations but that need not make us despair of the corporations. With lapse of time, the necessary experience will be acquired and the working of the corporations will also improve.
However, all this is possible if top management including political elite mend their ways and desist from interfering in day to day administration. Besides, full measure of accountability should not remain as a theoretical proposition. It must be operationalized with full sincerity so that Indian corporations could contribute their bit towards the attainment of national goals.