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Chapter 33: EXECUTIVE ORGANIZATIONS
Introduction
These are engaged in execution of policies formulated by
the secretariat. These are headed by an executive head like
director, inspector general, commissioner etc. There are two
types of executive offices:
- Attached office: They provide
executive direction needed in policy implementation laid
down by ministry to which they are attached. They also
furnish technical data to ministry to which they are
attached.
- Subordinate office: Agencies
responsible for execution of decisions of government. They
work under direction of attached offices.
Pattern of relationships
- Complete separation
- Complete merger
- Link officer merger: A senior secretariat officer is
head of executive agency.
- Common file patterns
- Common office patterns
- Ex officio secretariat: The head of agency is member of
secretariat.
Second administrative reforms commission recommended that
agencies involved in development functions should be
integrated with secretariat.
Public Enterprises
These are also executive agencies and of the following
types: Departmental undertakings, public corporations,
government companies and holding companies.
Departmental undertaking: Entire
investment is by government. Private players are barred. It
is financed by the treasury and entire revenue earned is
credited to treasury. Auditing on lines of a government
department, permanent staff is civil servant. Recruitment
and service conditions are same as any other government
department. It is accountable to parliament by a minister
and possesses sovereign immunity of government.
| Advantage |
Disadvantage |
| provides maximum degree of control by minister |
lacks autonomy |
| has clear responsibility of government department |
excess control and low initiative and flexibility |
| enables government to have better control |
rigid, financial control |
| standard patterns and rules of government. |
high centralization |
| suitable for strategic sectors of country like
defence, railways |
bureaucratic structure so inefficiency and no
incentive to provide better service. Monopoly in
country makes it free from improvement. |
Public Corporations: Corporate body created
by public authority with defined powers, functions and
financial independence. It is wholly owned by state. But no
immunity from suits. It is independently financed with limited
autonomy. It isn't subject to financial controls of
parliament. Board of directors are appointed by government and
Public undertakings committee examines its matters.
| Advantage |
Disadvantage |
| Autonomy in day to day administration |
rigid structure can be amended by statutes |
| free from political interference |
problems are seen when government tries to control
it through board of directors |
| synthesis of commercial efficiency of private
company with accountability of government |
interference by ministers who can force them to
follow directions. |
| financial flexibility and personnel autonomy seen |
Comes under ambit of agencies like CVC, CAG and CBI
that hinders decision making |
Government Company: These are established
under the companies act.Government prefers private limited
companies and keeps majority share holding with itself. This
is outside the ambit of government rules and other controls.
It has operational flexibility and financial autonomy.
Features: Government controls them through
board of directors so autonomy is limited. Government can
force it to declare dividends, buy shares etc. Easy,
expansion, allows equity from private sector too. So
management is diverse. Suitable for non strategic, commercial
functions.
Holding Company: Integrates all companies
operating in same management if they are working in same area.
Facilitates coordination and execution of policies. Directors
can be appointed by government as per the share holding. Proxy
control and interference possible. Shall remain subject to
CVC, CAG and CBI till government control is majority. RTI Act
also remains applicable. All above factors hinder decision
making.
Solutions:
- An MoU can be signed between government and management
to provide greater autonomy and reduce interference in day
to day administrative matters.
- Make PSU management responsible and accountable for
results but give them sufficient autonomy.
- Define obligations of both parties to improve
performance.
- Reduce government share holding to below 51% wherever
possible like non strategic sectors.
- Government should practise management by exception.
- Block interference of courts in public enterprises.