Parliamentary control over Public Corporation in India

By the expression “Public Corporation” is meant the type of body set up to operate nationalised industries or for the organisation of their public enterprise and ser­vices.

These Corporations are generally formed to meet the special problems arising out of the execution of large scale irrigation and power projects covering more than one State or for other public un­dertakings which may require powers and privileges which could not generally be obtained under the Company Law.

Further, in the case of such development projects and undertakings of public importance, the statute defining the relationship between them and Government would seem to be the most proper form of management, whereas in the case of enterprises engaged in continuous manufacturing activity such as large scale industry it would appear that the company form is more suitable, as it provides the requisite freedom and elasticity.

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The statutory Boards or Corporation which had been formed are:

(1) The Damodar Valley Corporation— 1948.

(2) The Industrial Finance Corporation—1948.

(3) The Rehabilitation Finance Administration—1948.

(4) The Employees’ Insurance Corporation— 1948.

(5) The Reserve Bank of India—1948.

(6) The Air Transport Corporation—1953.

(7) The State Bank of India—1955; and

(8) The Life Insurance Corporation—1956.

These Corporations are treated both as public authorities and as, commercial concerns. As public authorities they are subject to the normal controls of constitution and administrative laws to supervision by the Minister, who in turn is answerable to Parliament, and by Courts through the control which they exercise over administrative authorities.

Parliamentary control over Public Corporation:

In the State establishing the Corporations it is often provided that their annual reports should be submitted to the Government of India giving an ac­count of the activities and then laid before both the Houses of Parlia­ment.

Under the Insurance Corporation Act, 1956, besides the auditor’s report and annual report, the report of the actuaries contain­ing the result of an investigation made by the actuaries into the finan­cial condition of the business of the Corporation should also be so laid.

The Parliamentary control over the function of the statutory cor­porations is confined to broad featured criticism and day to day functioning is outside the purview of such control. The member’s right to ask questions about the public undertakings and general debates especially the budget debate provide the occasions for such criticism.

The Estimates Committee of the House of the People has often been making suggestions with a view to proper working to the Damodar Valley Corporation and the Oil and Natural Gas Commis­sion and other Corporations.

A Committee of the Parliamentary Con­gress party under the chairmanship of Shri V.K. Krishna Menon has also gone into the matter and made certain recommendations. Amongst other things it has suggested the appointment of a Commit­tee of the Lok Sabha for exercise of continuous broad supervision.

The Committee has made recommendations with a view to make Parliament’s control “real and gainful” by watching the functioning of the Corporations.

It is difficult to say exactly how this Committee shall work in such a manner that it makes the Parliamentary super­vision “real and gainful” and at the same time not provide an instru­ment of interference into the normal working of the Corporations.