The following setback could be traced in the working of Government Companies.
1. Absence of freedom of operation:
The superiors of the companies do not get a free hand in decision making.
2. Chance of misuse of power:
The authority and powers are likely to be misused by the superiors and directors of the Government Companies.
3. Restricted growth:
The Companies show slower growth potentials when decisions are not promptly taken.
4. Political interference:
Predominantly the political powers or vested interests interfere in the operations of the Government Companies.
5. Inefficiency in administration:
The officials appointed are salaried employees and thus will not take initiative in managing the affairs of the organisation properly.