Tagore International School, Sahnewal

Assignment
Class : XI Commerce
Subject: Business Studies

is the oldest
and most
Q.! departments of the
ministry
(a) Departmental undertakingand aretraditional form of
Multiple
Choice
Government company considered part ororgananising public Questions (MCQS) 3.1
(b) ext ension ofcorporation
Government
Q2
functioning of the functions through
The
Statutory enterpmirisnes.istry These
the
itself. enterprises are established
government.
(a) Departmental undertakings
(d) Joint
and the Stock Company
(c) Government companies aciviies performed
Q3
Which of the
following is a (b) Statutory corporationsby them are an integral part of the
(a) Since the Government limitation of (a)
not have much relevanceis the only government Joint Stock Companies
(b) It evades
companies?
shareholder in some of the
answerable constitutional
directly to the responsibility,
which a company
companies, the provisions of the
government being theParliament
(c) The Companies Act does
sole financed by the government should have.
government. The main
purpose of a shareholder, the
management
It is not
(d) Allthe above government company, registered administration rests in the hands of
and
Q4 act through the officers of the like other companies, , is defeated. the
(a) Departmental undertakings Government and its employees are
() Government companies Government employees.
(b) Statutory corporations
Q5 Which of the following is not a merit of (a) Joint Stock
departmental Companies
eftective controlundertaking:
(o) Facilitate the Parliament to exercise
(6) High degree of operational flexibility over their operations
(c) High degree of public accountability
(d) Good source of income for the Government
.6 Which of the following is a limitation of departmental undertakings?
a) The employees or heads of departments of such undertakings are not allowed to take independent decisions,
without the approval of the ministry concerned.
(b) There is red tape in day-to-day operations and no action can be taken unless it goes through the proper channes of
authority
() There is a lot of political interference through the ministy.
(a) Allthe above
legislature with defined powers and functions and is tinancialy independent
5a corporate body created by the activity.
with a clear control over aspecified arca or a particular type of commercial
(a) Deparcmental undertaking
(b) Statutory corporation
8
c) Government company 8 (d) Joint Stock Company
 amount of operating tlexibility ot
Q.8 have the power of the government and considerable private
(a) Departmental undertakings (6) Government companies enterprives,
(c) Statutory corporations (d) Joint Stock Companies
Q9 Which of the following is not true in case of Statutory Corporations:
of operational flexibility.
(a) They enjoy independence in their functioning and ahigh degree
control.
(6) They are free from undesirable government regulation and
(c) The funds of these organisations come from the central budget.
policies and procedures within the powers
(d) Since they are autonomous organisations they frame their own
to them by the Act.
companies in the
Q.10 are established for purely business purposes and in true spirit compete with private sector
(b) Government companies
(a) Departmental undertakings
() Statutory corporations 8(d) Joint Stock Companies
Q11 Which of the following is not true in case of government companies?
Law.
(a) It is an organisation created under the Companies Act, 2013 or any other previous Company
be sued.
(b) The company can file a suit in a court of law against any third party and
other private sharehal.
(c) The government company obtains its funds from government shareholdings and
(d) It is not permitted to raise funds from the capital market.
Q.12 Which of the following is amerit of government companics?
(2) It has a separate legal entity, apart from the Government.
(b) It enjoys autonomy in all management decisions and takes actions according to business prudence.
(c) These companies by providing goods and services at reasonable prices are able to control the market and
unhealthy business practices.
(d) Allthe above
Q.13 consists of various organisations owned and managed by Government.
(a) Private Sector (b) Manufacturing Sector
(c) Public Sector 8 (d) Service Sector
Q.14 Which of che following is formed through aspecial Act in the Parliament?
(a) Government company O6) Departmental Undertaking
(c) Statutory Corporations (d) Multi-National Corporations
Q.15 'Red tape' is an essential feature of
(a) Government company (b) Departmental Undertaking
(c) Statutory Corporations (d) Muli-National Corporations
Q.16 The employees of are headed by IAS.
(a) Government Companies (b) Statutory Corporations
() Depart1mental Undertakings
Q17 Steel Authority of India is an example of.
8 (d) Multi-National Corporations

(a) Statutory Corporations (6) Departmental Undertaking

(c) Government Company (d) Multi-National Corporations
Q.18 Life Insurance Corporation of India is an example of
(a) Government Company (b) Departmental Undertaking
(c) Multi-National Corporations () Starutory Corporation
Q19 Statement I: The public sector enterprises may cither be partly or wholly owned by the central or state government
Statement II: The public sector enterprises are characterised by public ownership, public funds being uscd o
activities and public accountability.
(a) Both the statements are true. b) Both the statemnents are false.
(c) Statement Iis true, Statement II is false. (d) Statement IIis true, Statement I is false. and
Q.20 Statement I: The employees of departmental undertakings are Government servants and their
recruitment

conditions of service are the same as these of other employees directly under the Government.
 directly under the
Satement ll: Sratutory oorations are accountable to the ministry since their management is
MAHnal ministr:.
Rxh the statements are truc. (b) Both the statements are false.
false.
Statement lis trac, Statement ll is false. (d) Statement IIis true, Statement I is
adequate sa
Sctement l: Deprtmental undertakings are usually insensitive to consumer needs and do not provide
Parliament.
existence by a Special
Act of the
Scatement ll: Government companies are public enterprises brought into
&) Boch thestatements are
true, (b) Both the statements are talse.
II is false. Statement IIis true, Statement I is
false.
i Statement I is true, Statement (d) and acquie
corporation is a body corporate and cansue and be sued. enter into a contract
, Satement l: A STArutory
name. governed y
NNYin its ow
statutory corporations are not government or civil servants and are not
Sparement ll: The employees of
gNernment rules and regulations. false.
(b) Both the statements are
a) Roth the statements are true. Statement I is false.
II is false. (d) Statement II is true,
e) Scatenment I is true, Statement
matters, including their income
and receipts.
interfere in their financial
government generally does not
n3 Asertion (A): Ihe organisations do not come from the
central budget.
Reason (R): The fundsof these (6) Assertion (A) is false, but Reason
(R) is true.
Reason (R) is false Reason (R) are false.
a) Assertion (A) is true, but true. (d) Both Assertion (A) and governed by
(R) are 2013 and is registered and
Both Assertion (A) and Reason the Companies Act,
established under
statutory corporation is
04 Satement l: A company.
provisions of the Act. private limited company or a public limited
he
goernment company may
be formed as a statements are false.
Scatement Il: A (b) Both the false.
are true. I is
(a) Bodh che
statements IIis true, Statement
(d) Statement
Statement IIis false. name of the President
of India.
(c) Starement Iis true, purchased in the government
a government company are over the management of
The shares of exercises control
03 Satement I: government is the
major shareholder and
Scatement II: The
companies.

(a) Both the

statements are true.
false.
(b)
(d)
false.
Both the statements
Statement
are
IIis true, Statement
Iis false. O0
0
Statement II is
(c) I is true,
Statement ministry?
following is related to a specific 6) FCI
Q26 Whih of the

O0
(a) Indian Railways ) BHEL
government company.
(c) Coal lndia paid up Capital of a
Government holds
minimum (b) 50%
Q7 (d) 26%
(2) 4996 ANSWERKEY
(c) 51% 11. (d) 12. (d)
9. (c) 10. (b)
7. (b) 8. (c) 23. (c) 24. (d)
6. (d) 21. (c) 22. (a)
4. (a) 5. (b) 19. (a) 20. (c)
1. a 2. (a) 3. (d) 17. (c) 18. (d)
16. (c)
13. (c) 14. (c) 15.(6)
25. (a) 26. (a) 27.(c)

uslions3.]
that
her in the face
Compalany Besd
headlines stared
newspapers.
The
another news
item on one
through some was she read
was going companies. The
next day there contrast to this,
Class XI, same. In curious
Q.1 Anita, a student of disinvest few cdosing the
its shares in a proposal for well. She was actually
Soverament plans
to losses and the were doing so
incurring heavy the private sector
company under
Pablic sector some of the
companies

on how
hother item
 to know what these terms like public sector,
business organisation-small or large, industrialdisinvestment, privatisation meant. She learnt there are all kind
or trading, privately owned or government owned existing in
country. These organisations affect our daily cconomic life and
Since the Indian economy consists of both privately owned and therefore become part of the lndian
government economy.
known as a mixed economny. The Government of India has opted for a mixed economy owned busincss enterprise
where
government enterprises are allowed to operate. The economy, therefore, may be classified into both private
two sector
private sector and public sector. Then there are businesses which operate in more than one country
global enterprises. Therefore, you may have observed that ll types of organisations are doing businesknomin h
country whether they are public, private or global.
(a) State the three types of enterprises discussed above.
3
(b) Explain the three forms of organisations in the publicsector.
3)
Ans. (a) Public sector enterprises, Private sector enterprises and Global Enterprises (explain)
(b) () Departmental undertaking (ü) Sarutory corporation (ii) Government company (explain)
Q.2 Once upon a time a round of Election to the five Legislative Assemblies of the country was in progress The
different political parties were putting in the best of their eftort to entice the people through their respectie
promises to them. There were three main political parties contesting elections in these states. One of the politicl
parties made a promise that if they came into power, they would set up such public sector enterprises in the
states which will have the partnership of both the public and the government. However, in these enterprises, the
ownership of the government shall not be less than 51%. The setting up of these enterprises is done as per the
provisions of the Indian Companies Act, 2013. The financing of these enterprises is done jointly by both, the
people and the government. The second political party promised that if they came into power, they would set u
such public sector enterprises which will be completely under the ownership of the government. The burden of
financing them will not be put on the shoulders of the people, but they will be managed with the general budget.
The thid political party, which was contesting the elections for the first time, promised that on coming into
power they would set up such public sector enterprises which will be fully financed by the government. Howevet.
there willbe no bar to get a loan from the people to set them up. They will be set up as per the special Act passed
by the Parliament or the State Legislative Assembly.
On the basis of the above para, identify the type of public sector enterprises to be set up as being promised by the
three political parties. Also state any two merits of cach of them. (6)
Ans. (a) The first politicalparty promised to set up Government Companies.
Merits:
() Agovernment company can be easily established under the Indian Companies Act, 2013. Aseparate Act in
the Parliament is not required.
(i) Ithas a separate legal entity, apart from the government. It is free from government regulations.
(b) The second political party promised to set up Departmental Undertakings.
Merits:
(i) Since control is direct and centralised, these undertakings facilitate che Parliament to exercise effective control
over their operations.
(i) These ensure a high degree of public accountability.
(c) The third political party promised to set up Public Corporations/Statutory Corporations.
Merits:
(i) The government does not interfere in their financial matters, including their income and receipts.
(ii) Astatutory corporation is relatively free from red tapism and burcaucracy and hence, can täke quick decisions.
Q3 Gas authority of India Ltd. (GAIL) is carrying on various projects of energy and power. Majority of its shares
are held by the government of India. It was registered under the previous Companies Act. It enjoys all the
characteristics of a company. The board of directors are appointed by the government. The Board and shareholders
are responsible for the efficient working of the company. The company prepares its annual report and submit to
the appropriate authorities.
(a) Name the typeof public sector enterprise referred to in the above para. ()
(b) In whose name does the government buy shares? (1)
(C) State any two features of the type of public sector enterprise identified in part (a) other than those discussed
in the above para. (2)
 (a) Government Company
(b) President of India
Ana,

) Features of government company

() The company can ile a suit in a court of law againt any third paty snd he ued
H) The company can enter into a contratand can xquire poperty in itsrwn ae
(úii) The government company obtains its funds from gvernment ohatehudings and dher prwae dhasehaier
is also permitted to raise funds from the capital market.
sFood Corporation of India(PCI)was established through special Actpawed in Pariamet in 1%4 with the chiyetm
of ereatingbffer stocks of foods like wheat, rice etc. lor emergency itustions like dromgt, MaA famine
() Which type of public sector enterprise is discused abovet
G) Does such enterpriscs have separate legal entity !
(G) Who provided initial capital to such enterprises! (3
(iv) Write any three merits of such organization.
Ans. (i) Statutory corporation
(i) Yes, astatutory corporation is a body corporate and can sue and be ued, enter into acntrt and iepe
in its own name
(ii) Government
0.5 Answer the following:
) Who heads the departmental undertakings?
(6) Why are departmental undertakings accountable to the ministry?
(c) Where national security is concerned, which form of public enterprises is most suítable?
(4) Why is there red tapism in day-to-day operations of adepartimental undertaking
Ans. (a) Departmental undertakings are headed by government employecs, IAS officers and civil servarnits.
(b) Because their management is directly under the concerned mínistry.
(c) Departmental undertakings, because they are under the direct control and supervision of the ministry.
(d) Because of bureaucrats control, no action can be taken unless it goes through the proper channels of authority.
0.6 Answer the following:
(a) Name the organisation formed by passing aSpecial Act of the Parliament.
(b) Name the company in which at least 51% shares are kept by government.
(c) Inwhose name the shares of agovernment company are purchased?
(4) Name the organisation which is considered as a part of government only.
Ans. (a) Statutory company
(b) Government company
(c) The President of India
(4) Departmental undertaking.
Q.7 State, giving reasons, whether the following statements are true or false: (6
(a) Public enterprises are owned by the public.
(6) Adepartmentally run enterprise enjoys corporate status.
() A statutory corporation is a body corporate.
(d) Reserve Bank of India (RBI) is an example of a Government company.
(e) Agovernment company enjoys maximum autonomy.
() The government provides funds to departmental undertakings.
Ans. (a) False: Public sector enterprises are owned, managed and controlled by the government.
(b) False: They are established as departments of the ministry, e.g., Indian Railways.
(c) Truc: Astatutory corporation can sue and be sued, enter into contract and acquire property in its own name.
(d) False: RBI is an example ofa statutory corporation.
le) True: It enjoys maximum autonomy in all management decisions and actions. Thete is no undue departmental
interference in the working of a government company.
() Tru: The funding of departmental undertakings come directly from the Government Treasury. The rvenue carned
by these is also paid into the treasury.