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Classification of Public Corporations

This document discusses different classifications of public corporations proposed by jurists and scholars. It summarizes: 1) Prof. Griffith and Street divide public corporations into two groups: managerial economic bodies and managerial social bodies. Prof. Hood Phillips divides them into four classes: managerial-industrial/commercial corporations, managerial-social services corporations, regulatory corporations, and advisory corporations. 2) According to Prof. Garner, public corporations can be divided into three groups: commercial corporations, regulatory corporations, and managerial corporations. 3) In India, public corporations may be classified into four main groups: commercial corporations, development corporations, social services corporations, and financial corporations.

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4K views3 pages

Classification of Public Corporations

This document discusses different classifications of public corporations proposed by jurists and scholars. It summarizes: 1) Prof. Griffith and Street divide public corporations into two groups: managerial economic bodies and managerial social bodies. Prof. Hood Phillips divides them into four classes: managerial-industrial/commercial corporations, managerial-social services corporations, regulatory corporations, and advisory corporations. 2) According to Prof. Garner, public corporations can be divided into three groups: commercial corporations, regulatory corporations, and managerial corporations. 3) In India, public corporations may be classified into four main groups: commercial corporations, development corporations, social services corporations, and financial corporations.

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6.

CLASSIFICATION
A logical classification of public corporations is not possible, and neither
Parliament nor the courts have made any serious attempt in that direc-
tion. But jurists have tried to categorise public corporations. Prof. Griffith
and Streetl4 divide public corporations into two groups: I) managerial
economic bodies, and 2) managerial social bodies. Prof. Hood Phillips
divides them into four classes: I) managerial-industrial or commercial
corporations; 2) managerial--social services corporations; 3) regulatory
corporations; and 4) advisory corporations. Acording to Prof. Garnerl'

12. Halsbury's Laws of England (4th Edn.)para. 1326.


13. Ramana Dayaram Shetty v. International Airport Authority of India, (1979) 3 SC
489: AIR 1979 SC 1628; Ajay Hasia v. Khalid Mujib
732: AIR 1981 SC 487; Som Prakash Rekhi v. Union
Sehravardi, (1981) I SCC 722,
198I SC 212. of India, (1981) I SCC 449: A I
14. Principles of Administrative Law (1967) 281-284.
15. Constitutional and Administrative Law (1967)
16. Administrative Law (1989) 347-354 556-557.
Classification 513
can
be divided
he dividec
into three
they
they groups: 1) commercial
regulatory corporations.corporations,
managerial corporations,:and
) 3)
dia.
In I Dublic corporations may be classified into four
main g r o u p s :
"ill-assorted
1. Commercial corporations
2 Development corporations
. Social services corporations
4. Financial corporations
4

la) Commercial corporations


This group includes those corporations which
perform commercial and
industrialfunctions.
dustrial functi The managing
body of
commercial corporation
a
resembles the Board of Directors of a public company. As their functions
are Commercial in nature, they are supposed to be
financially self-sup-
P
norting and they are also expected to earn profit. At the same time
they
are required to conduct their attairs in the interests of the public and do
not Operate merely with a profit-earning motive unlike a private industry.
State Trading Corporation, Hindustan Machine Tools, Indian Airlines
Corporation and Air India International are some of the commercial
corporations.

(b) Development corporations


The modern State is a "welfare state". As a progressive state, it exercises
many non-sovereign functions also. Development corporations have been
established with a view to encourage national progress by promoting
developmental activities. As they are not commercial undertakings, they
may not be financially sound at the initial stage and may require finan-
cial assistance from the government. Oil and Natural Gas Commission
(now Corporation), Food Corporation of India, National Small Industries
Corporation, Damodar Valley Corporation, River Boards, Warehousing
Corporations, are development corporations.

C Social services corporations


wB have been established for the purpose of providing
Corporations which
Corporations
social services to the citizens on behalf of the government are notcommer
cial i and therefore, are not expected to be financially self-support
Ing. In fact, as their object is to render social service, they are not required
to cond
their affairs for the purpose of earning profits. Generally, they
de ct Boards,
o n the government for financial assistance. Hospital
POyees State Insurance Corporation, Housing Board, Rehabilitation
lousing Corporati ation are examples of social services corporations.
514 Lecture 11 Public Corporations
(d) Financial corporations
This group includes financial institutions, like Reserve Bank of
(RBI), State Bank of India, Industrial Finance Corporation of India
Insurance Corporation of India and Film India, Life
Financing Corporation. They
advance loans to institutions
such terms and
carrying on trade, business or industry on
conditions as may be agreed upon. T hey may
credit to those institutions provide
which find it difficult to avail of the same
which do not find it or
possible to have recourse to capital issue
(e.g. Industrial Finance Corporation). methods
on reasonable They may give financial assistance
terms to displaced in order to enable them to
persons
in trade,
business or industry (e.g. Rehabilitation Finance settle
Corporation)

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