Parliamentary Control –

One of the principal reasons that had led to the establishment of public corporation instead of departmental undertaking is the desire to avoid detailed parliamentary scrutiny. This does not mean that public corporations enjoy complete freedom from such control. Parliament’s right to keep an eye over the working of public corporations is undisputed in any diplomatic country.

The following process has been adopted for controlling the corporations:

(1) Legislation –

The parliamentary control begins with the very Act of legislation which brings the corporations into existence. Parliament in India does take great pains to fulfil this responsibility.

(2) Laying of rules and regulations –

By this process some of the Acts setting up public corporations provide that rules made under these Acts are to be laid before parliament.

(3) Questions –

Under Rule 32 of the Rules of Procedure of the Lok Sabha unless Speaker otherwise directs, the first hour of every sitting shall be available for the asking and answering questions.

(4) Half an hour discussion. –

Under Rule 55 of the rules of procedure of the Lok Sabha, the Speaker can provide half an hour for raising discussion on a matter of a recent question and answer which needs elucidation on matter of fact.

(5) Statement by Ministers. –

Under Rule 372 of the Lok Sabha Rules, Minister may make a statement on a matter of public importance with the consent of the Speaker. So far, however, the method has not been used extensively in the matter of public corporations.

(6) Resolution. –

Discussion on matters relating to public corporation may occur through the medium of resolution (Rules 136 and 137 of the Rajya Sabha Rules).

(7) Motions. –

Actually motions provide the general form of discussion of matters related to a public corporation while the other procedures afford special opportunities.

(8) Parliamentary Committee –

In 1957, Estimates Committee recommended that public undertakings should prepare a performance and programme statement for the budget year together with the previous year’s statement and it should be made available to Parliament at the time of the annual budget.

Government Control –

The government exercises control over public undertaking through various ways. It exercises the power to appoint and remove the Chairman, directors or members of the Board and the managing director. The Government also controls the appointment of senior executive officers. The rule regarding the regulation of Constitution of services of employees of these public corporations require the approval of the Government. The Comptroller and Auditor General exercises varying degree of control in the matter of audit of accounts of the corporations.

(A) Appointment and removal of members –

Generally, the power of appointment and removal of the Chairman and the members of a public corporation is vested in the Government. This is the key provision and the most effective means of control over a public corporation. In some statutes, a provision is made for removal of a member on the ground that the member is absent from meetings for a specified period, he is adjudged a bankrupt or is `otherwise unsuitable’ to continue as a member.

(B) Finance –

The Government exercise effective control over a public corporation when such corporation is dependent on the Government for finance. A statute may require previous approval of the Government for undertaking any capital expenditure exceeding a particular amount. It may also provide to submit to the Government its programme and budget for the next year and to submit the same in advance. It may also impose a condition on the corporation to take consent of the Government before borrowing money or may insist for issuance of bonds and debentures to secure payment made by the government to the corporation. The Comptroller and Auditor General exercises control in the matter of audit of accounts submitted by public corporations.

(C) Directives –

An important technique involved to reconcile governmental control with the autonomy of the undertaking is to authorize the Government to issue directives to public undertakings on matters of `policy’ without interfering with the matters of day-to-day administration. A statute may empower the government to issue such directives, as it may think necessary on questions of policy affecting the manner in which a corporation may perform its function.

(D) Rules and Regulations –

Usually a constituent statute creating a corporation contains provisions to make rules and regulations. The provision empowers the Central Government to make rules `to give effect to the provisions of the Act.’ The other provisions authorize the corporation `with the prior approval of the Central government’ to make regulations `not inconsistent with the Act and the Rules made thereunder’ for enabling it to discharge its functions under the Act. Thus, even in case of framing rules and regulations, the Government is having the upper hand. Regulations promulgated without previous approval of the Government cannot be said to be valid.

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