IGNOU BCOC 132 2026 2027 - What is a government company? Explain its merits and

Question

What is a government company? Explain its merits and
limitation

05 Aug 2026

Answer :

Word Count : 411

A government company is a company in which not less than 51 percent of the paid-up share capital is held by the Central Government, State Government, or jointly by both Central and State Governments. It is registered under the Companies Act and has a separate legal identity from the government. Such companies are established to combine the advantages of business management with the objectives of public welfare and economic development. Examples include public sector companies such as Steel Authority of India Limited (SAIL) and Bharat Heavy Electricals Limited (BHEL). Government companies have several important merits. First, they enjoy greater managerial flexibility because they are registered as companies and can take business decisions more quickly than departments directly controlled by the government. Second, they have a separate legal identity, which enables them to own property, enter into contracts, borrow funds, and conduct business in their

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