Committee on Public Undertakings is a Parliamentary Committee consisting of 22 Members. It was established in 1964 in response to growing Public Sector Undertakings in India. It examines the reports and accounts of public undertakings which are specified in the fourth Schedule to the Rules of Procedure and Conduct of Business in Lok Sabha. This article explains the topic Committee on Public Undertakings, Composition and Functions of the Committee are useful for UPSC IAS exam preparation.

Significance of Public Sector in India

• The public sector has been a vital pillar of our economy, particularly in India, where it has been instrumental in tackling various socio-economic challenges like income inequality, underemployment, and regional economic disparities.
• Initially, its focus was on fostering self-reliant economic growth by prioritizing core sectors. However, in its subsequent phase, it extended its reach into the private sector as well.
• This expansion included nationalizing several industries and assuming control of struggling private enterprises, eventually diversifying into the production of goods.
• Committee on Public Undertakings was established in 1964 on the recommendations of the Krishna Menon Committee. Originally it has 15 members however in 1974, its membership was raised to 22.

Committee on Public Undertakings: Composition

Functions of the Committee on Public Undertakings

• To examine the reports and accounts of Public Undertakings specified in the Fourth Schedule to the Rules of Procedure and Conduct of Business in Lok Sabha
• To examine the reports of the CAG on Public Undertakings.
• Examine whether the affairs of the Public Undertakings are being managed in accordance with sound business principles and prudent commercial practices.
• To exercise such other functions vested in the public accounts committee and the estimates committee in relation to public undertakings which are allotted to it by the Speaker from time to time.

Exceptions: The committee is not to examine and investigate any of the following

• Matters of major government policy as distinct from business or commercial functions of the public Undertakings.
• Matters of day to day administration.
• Matters for the consideration of which machinery is established by any special statute under which a particular Public Undertakings is established.

Limitations of the Committee on Public Undertakings

• The committee is restricted in its capacity to assess reports from a limited number of Public Sector Undertakings (PSUs), typically ranging from 10 to 12 annually.
• Its primary focus lies solely on reviewing reports, without any involvement in the operational aspects of public utilities. Consequently, its role primarily entails conducting post-event evaluations.
• The committee lacks technical proficiency and therefore does not engage in evaluating the technical facets of PSUs.
• All recommendations put forth by the committee are non-binding in nature, serving merely as advisory measures, with ministers retaining discretion in their implementation.

Conclusion

The Committee on Public Undertakings plays a vital role in ensuring accountability, transparency, and effective governance in the functioning of public undertakings and related subjects. It stands as a cornerstone of parliamentary oversight, dedicated to advancing the public interest and upholding the principles of good governance.

FAQs

MCQs

1. What is the primary role of the Committee on Public Undertakings (COPU)?

A) To formulate policies for public enterprises
B) To examine reports and accounts of public sector undertakings
C) To manage public sector enterprises
D) To oversee budget allocations for ministries

2. How many members are there in the COPU?

A) 10
B) 15
C) 22
D) 30

3. Under which act was the COPU established?

A) Companies Act, 1956
B) Lok Sabha Rules of Procedure
C) Constitution of India
D) Public Accounts Committee Act

4. Which of the following is NOT a function of the COPU?

A) Reviewing the efficiency of public sector undertakings
B) Approving budgets for PSUs
C) Examining CAG reports related to PSUs
D) Making recommendations for improvement

5. What is one of the challenges faced by the COPU?

A) Excess funding
B) Political neutrality
C) Limited resources and time constraints
D) Oversight of private enterprises

GS Mains Questions and Model Answers

Q1: Evaluate the role of the Committee on Public Undertakings (COPU) in enhancing accountability in public sector enterprises.

Answer: The Committee on Public Undertakings (COPU) plays a vital role in enhancing accountability within public sector enterprises by scrutinizing their operations and financial performance. By examining reports from the Comptroller and Auditor General (CAG) and holding discussions with the management of these enterprises, the COPU ensures that public sector undertakings operate efficiently and transparently. Its recommendations for improvement contribute to better governance and operational effectiveness, safeguarding public interests. Furthermore, the COPU's efforts to highlight inefficiencies and promote best practices foster a culture of accountability among public enterprises, ultimately leading to more responsible use of taxpayer resources and improved service delivery to citizens.

Q2: Discuss the challenges faced by the COPU in fulfilling its mandate effectively.

Answer: The COPU faces several challenges in fulfilling its mandate effectively, including bureaucratic hurdles, limited resources, and time constraints. The complexity of corporate governance issues requires extensive investigation and expertise, which may not always be available within the committee. Additionally, political considerations and party affiliations can influence the functioning of the COPU, impacting its objectivity and effectiveness. The lack of access to necessary information from public sector undertakings can further hinder the COPU's ability to conduct thorough evaluations. Addressing these challenges requires enhancing institutional capacities, increasing transparency, and ensuring that the COPU operates independently from political pressures to maintain its effectiveness in overseeing public enterprises.

Q3: Analyze the impact of the COPU on the functioning of public sector undertakings in India.

Answer: The COPU has a significant impact on the functioning of public sector undertakings (PSUs) in India by promoting transparency, accountability, and performance improvement. Through its oversight functions, the COPU identifies inefficiencies and malpractices within PSUs, encouraging management to adopt corrective measures. The committee's reports often serve as a catalyst for policy reforms and operational changes, fostering a culture of performance-oriented governance. Furthermore, the COPU's engagement with stakeholders ensures that public enterprises are held accountable for their actions, thereby enhancing public trust in these institutions. Ultimately, the COPU's influence leads to better management practices, increased efficiency, and improved service delivery from public sector undertakings.

Previous Year Questions on COPU

1. UPSC CSE Prelims 2021:

Question: What is the primary function of the Committee on Public Undertakings?

A) To formulate policies for public sector enterprises
B) To examine reports of public sector undertakings
C) To manage government budgets
D) To conduct audits of private firms

Answer: (B)

Explanation: The primary function of the COPU is to examine reports and accounts of public sector undertakings to ensure accountability and efficiency.

2. UPSC CSE Mains 2020 (GS Paper 2):

Question: "Assess the challenges faced by the Committee on Public Undertakings in overseeing public sector enterprises."

Answer: The Committee on Public Undertakings faces several challenges in effectively overseeing public sector enterprises, including limited resources and bureaucratic obstacles that hinder timely evaluations. The complexity of corporate governance issues necessitates thorough investigations, which may be hampered by a lack of access to necessary information from public enterprises. Additionally, political pressures and party affiliations may impact the committee's objectivity and functioning. To address these challenges, enhancing transparency, providing adequate resources, and ensuring independent operation of the COPU are essential for its effective oversight of public sector undertakings.

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