The merits of Government companies are:
A Government Company can be formed very easily, as no special Act of parliament is needed for its formation.
Unlike the officers who manage a departmental undertaking, the directors of a Government company are free to take decisions. Therefore, they can take quick decisions and prompt action according to the circumstances
In a Government company, there is room for ***** ownership by the government and the members of the public.
The demerits of Government companies are:
The directors of a Government company are merely paid officials. They do not get any share in the profits of the company. Therefore, they may not take active interest in the management of the company.
The directors of a Government company are appointed by the Government. So, they spend more time in pleasing the ministers, top Government officials and political leaders than in managing the business of the company.
In practice, the directors of a government company are not answerable for their action either to the parliament or to the general public. Therefore, they may be tempted to do certain things which may go against public interest.
