What are the Demerits of Departmental Undertakings?

The organisations, however, suffer from the following drawbacks:

1. Rigidity:

Because of the centralisation of activities, the control measures become rigid and not suitable for changes easily.

2. Delay in decision-making:

Decision making tends to be delayed on account of bureaucracy creeping in due to the centralisation of activities.

3. Constant political interference:

The working of the Departmental organisations is largely influenced by political interferences, as the control authority is a political head.

4. Limited managerial ability:

Government officials and others may not be qualified or efficient enough in handling these organisations properly and profitably.

5. Limited scope:

These organisations may not reach all segments of the society and the scope of its expansion would be restricted by Government policies.