Explain, why a statutory or public corporation are suitable for managing public enterprises?
The statutory or public corporation is best suited for managing public enterprises reasons are:
Works with service motive: Such corporations work in order to provide services and not with an aim to earn profit only. Surpluses generated by public corporations are used for the benefit of consumers and community.
Secures working efficiency: It provides better amenities and more attractive terms of service to its employees, reducing the labor problems. Because of this, corporations secure better working efficiency.
Protects public interest: It ensures protection of public interest because it is free from political interference and departmental checks and controls. Public corporations help in ruling out the exploitation of any one class at the cost of another.
Easy to raise capital: Statutory corporations can easily raise the capital needed on their own with the help of floating bonds at low rate of interest. Such bonds are safe enough that even public can subscribe them.
Avoids red-tapism: A public corporation can take quick decisions and prompt actions on any matter affecting its business. Evils like bureaucracy and red-tapism are avoided in such corporations. It sometimes become difficult to carry on functions related to business in such corporations because of rules, regulations and procedures.
Secures benefits of large scale economies: It is easy to reap considerable economies in management by affecting the integration of several companies under this form. For example: big government undertakings like banking, transport etc can secure better management and staff with lesser costs.