Short essay on Joint Sector Undertakings



Joint Sector Undertakings:

Joint sector consists of business undertakings wherein the ownership, control and management are shared jointly by the Government, the private entre­preneurs and the public at large.

According to the guidelines laid down by the Government of India, the share capital of a joint sector undertaking (without foreign participation) is to be divided as follows: gov­ernment 26 per cent, private businessmen 25 per cent and the public 49 per cent.

No single individual or organisation can hold more than 25 per cent of the paid-up capital of a joint sector enterprise without the permission of the Central Government.

In case of foreign participation, the respective shares will be: Government 25 per cent, Indian entrepreneur 20 per cent, foreign investor 20 per cent and the investing public 35 per cent.

Maruti Udyog, Cochin Refineries and Gujarat State Fertilizers are examples of joint sector undertakings in our country.

The main characteristics of joint sector enterprises are as follows:

1. Mixed Ownership:

The government, private entrepreneurs and the investing public jointly own a joint sector enterprise.

2. Combined Management:

The management and control of a joint sector enterprise lies with the nominees or representatives of the Government, private businessmen and the public.

3. Share Capital:

The shares of the Government, private businessmen and the public in the capital are 26 per cent, 25 per cent and 49 per cent, respectively. The aim is to pool the financial resources and technical know-how of the State and the private individ­uals.