These undertakings are owned and operated by the Central and State Governments. The main characteristics of public sector undertakings are given below:

1. State Ownership:

Public undertakings are fully owned by the Government or some public authority. For example, Reserve Bank of India is owned by the Central Govern­ment while Delhi Transport Corporation is owned by the Government of Delhi State.

2. Government Control:


The ultimate control of a public sector undertaking lies with the Government.

3. Service Motive:

The primary objective of a public sector undertaking is to render service to the public at large. In order to serve the public, it may even incur loss. For example, the Food Corporation of India provides food grains to the public at subsidised prices.

4. State Financing:


The Government provides the capital and funds through appropria­tions from its budget. The government may also provide loans from time to time from the State exchequer.

5. Bureaucratic Management:

The management of public sector undertakings is bureau­cratic in the sense that their operations are governed by certain rules and regulations prescribed by the Government.

6. Public Accountability:


Public sector undertakings are accountable to the public at large for their performance and results. The annual audit of these undertakings is con­ducted by the Comptroller and Auditor General of India. Moreover, their annual reports are subject to discussion in the Parliament or the State legislature.