Examine the Various Controls
Public corporations play a crucial role in a modern welfare State. They are created by statutes to carry out important commercial, industrial, and public utility functions such as transport, electricity, banking, and infrastructure development. While these corporations enjoy operational autonomy and flexibility, they are entrusted with public funds and public responsibilities. Therefore, it becomes essential to ensure that their functioning remains transparent, efficient, and accountable. The Law of Administration provides multiple mechanisms to regulate and control the working of public corporations so that they act in the public interest and do not misuse their statutory powers. These controls operate at different levels, including parliamentary, executive, judicial, financial, and public controls.
Meaning and Nature of Public Corporations
A public corporation is a statutory body created by an Act of the Legislature, having a separate legal identity, perpetual succession, and the power to sue and be sued in its own name. Examples include the Life Insurance Corporation of India (LIC), State Electricity Boards, and Food Corporation of India. Although public corporations function with business efficiency, they are not private enterprises. Since they discharge public functions, their actions must conform to constitutional principles such as rule of law, fairness, and reasonableness, as laid down under Articles 14 and 21 of the Constitution of India. Hence, various forms of control are imposed to balance autonomy with accountability.
Parliamentary Control
Parliamentary control is one of the most important democratic controls over public corporations. Since these bodies are created by statutes enacted by Parliament or State Legislatures, they remain answerable to the legislature.
Parliament exercises control through questions, debates, discussions, and committees. Members of Parliament may raise questions regarding the policies, performance, and financial management of public corporations. Parliamentary Committees such as the Public Accounts Committee (PAC) and the Committee on Public Undertakings (COPU) closely examine reports, accounts, and efficiency of these corporations. Annual reports and audited statements are required to be laid before Parliament, enabling legislators to review their functioning. This form of control ensures political accountability and prevents misuse of public power.
Executive or Government Control
Executive control is exercised by the concerned ministry or department under which the public corporation operates. Though corporations enjoy independence in day-to-day management, the government retains significant supervisory powers.
Such control includes appointment and removal of top officials, approval of major policy decisions, budget sanctions, and issuance of general or specific directions. Many statutes expressly empower the government to give policy directions to public corporations in the public interest. For example, under several enabling Acts, the government may supersede the corporation in cases of persistent default or abuse of power. Executive control ensures that public corporations align their activities with national policies and developmental goals.
Financial Control
Financial control is an effective mechanism to regulate the functioning of public corporations, as they operate using public funds. These corporations are often funded through government grants, loans, or guarantees.
Their accounts are subject to audit by the Comptroller and Auditor General of India (CAG) under Article 149 of the Constitution. The audit reports are placed before Parliament, ensuring transparency and fiscal discipline. Budget approvals, limitations on borrowing powers, and scrutiny of expenditure further strengthen financial control. Through these measures, the law ensures that public money is not wasted and is utilized for the purposes intended by the legislature.
Judicial Control
Judicial control acts as a powerful safeguard against arbitrary, unreasonable, or illegal actions of public corporations. Since they are “State” within the meaning of Article 12 of the Constitution, their actions are subject to judicial review.
Courts can intervene through writs under Articles 32 and 226 when public corporations violate fundamental rights or act beyond their statutory powers. Principles of natural justice, such as the right to be heard and absence of bias, must be followed. Landmark cases like R.D. Shetty v. International Airport Authority of India established that public corporations must act fairly and cannot behave like private entities. Judicial control thus ensures legality, fairness, and accountability in administrative actions.
Administrative and Ministerial Control
Administrative control is exercised through internal mechanisms such as rules, regulations, and service conditions framed under the parent statute. These controls regulate recruitment, discipline, promotions, and working conditions of employees.
Ministerial supervision also plays an indirect role, where ministers are politically responsible for the acts of public corporations under their charge. Though ministers do not interfere in daily operations, they remain accountable to the legislature for major decisions and failures. This ensures coordination between administration and political responsibility, a core principle of administrative law.
Public and Media Control
Public opinion acts as an informal yet influential control over public corporations. As these bodies exist to serve public interest, criticism from citizens, civil society, and media can compel them to improve performance and transparency.
The Right to Information Act, 2005 has strengthened public control by enabling citizens to seek information regarding decisions, contracts, and expenditure of public corporations. Media scrutiny, social audits, and public interest litigation (PIL) further act as checks on inefficiency, corruption, and abuse of power. This form of control enhances participatory governance and democratic accountability.
Mnemonic to Remember the Controls
“PEFJAP” – Please Ensure Fair Just Administrative Performance
- P – Parliamentary Control
- E – Executive (Government) Control
- F – Financial Control
- J – Judicial Control
- A – Administrative & Ministerial Control
- P – Public & Media Control
This mnemonic helps in quick recall during examinations and answer writing.
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