1. State ownership: A public
enterprise is wholly owned by the Central Government or Stat
Government (s) or local authority or jointly owned by two or more of
them. In case the enterprise is owned both by the Government and
private sector, the Stat must have at least 51 percent share in
2. State control: The
ultimate control of a public enterprise lies with the Government
which appoints its Board of Directors and the Chief Executive.
Government financing: The whole
or a major portion of the capital of a public enterprise is provided
by the Government.
4. Service motive : The
primary aim of a public enterprise is to render service to the
society at large. It may have been to incur losses for this purpose.
However, public enterprises are expected to generate surplus in
course of time.
5. Public accountability: Public
enterprises are financed out of public money. Therefore, they are
accountable for their results to the elected representatives of he
public, i.e, the Parliament and the State Legislature. That is why,
the working of pubic enterprises is scrutinized by the Committees of
the Parliament or the State Legislature.