There are three different forms of organisation used for the public sector enterprises in India. These are:
- Departmental Undertaking
- Statutory (or Public) Corporation
- Government Company
Departmental Undertaking form of organisation is primarily used for provision of essential services such as railways, postal services, broadcasting, etc. Such organisations function under the overall control of a ministry of the Government and are financed and controlled in the same way as any other government department. This form is considered suitable for activities where the government desires to have control over them in view of the public interest.
Statutory Corporation (or public corporation) refers to a corporate body created by the Parliament or State Legislature by a special Act which define its powers, functions and pattern of management. Statutory corporation is also known as public corporation. Its capital is wholly provided by the government. Examples of such organisations are Life Insurance Corporation of India, State Trading Corporation, etc.
Government Company refers to the company in which 51 percent or more of the paid up capital is held by the government. It is registered under the Companies Act and is fully governed by the provisions of the Act. Most business units owned and managed by government fall in this category.