Public Enterprises refer to an activity of business character, managed, control and owned, 51% or more by government whether central, state or local government for providing goods and services at a price.
Thus above definition is consist of two Important Points:
a) Public ownership : The PEs is managed and owned by Government of India.
b) Business enterprises: It provide the Goods and Services to society at large at a reasonable price.
MAJOR FUNCTION OF PES:
To setup and enforce rules for competitive game
Stabilize the economy
Redistribution of national Income
CHARACTERSTICS OF PES:
Sphere of activities demarcated
Not exclusively profit oriented
Attitude of management toward workers
MULTIPLE AND VAGUE OBJECTIVES OF PUBLIC ENTERPRISES:
A major problem of public enterprises is their multiple and undefined objectives. PEs is perceived differently by those who owns, managed and control the public enterprises.
Till the closure of 1980s, Social and strategic dimensional of PEs was continued to emphasized. But after 1980 and specially in the beginning of 1990s, the government wake upon for the need of return on capital investment
The multiplicity of objective comes in the way of holding the PEs accountable for the inadequate financial performance
The government now emphasis the need for an adequate return on capital investment but the problem there multiple objective and relative emphasis continue.
The committee on public undertaking (COPU) established by Parliament emphasis upon “Autonomy and accountability”, that is, mixture of social and commercial objective to an extent it lead to ambiguity and therefore clarity rather than vagueness become imperative here.