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Difficulty: Very hardPublic Corporations: Organization, Commercialization, Privatization, and Control

A statutory public corporation in charge of national power distribution unilaterally increases service tariffs to offset expanding debt without securing the formal consent of its supervising Minister, citing its financial self-sufficiency goals. If the supervising Minister officially revokes the tariff hike and suspends the board of directors, which form of control and legal basis is being exercised over the enterprise?

  1. Ministerial control exercised through statutory supervisory powers and policy directivesAnswer
  2. B
    Judicial control implemented through an order of certiorari invalidating ultra vires corporate actions
  3. C
    Parliamentary oversight executed through the Public Accounts Committee's audit sanction powers
  4. D
    Commercialization control established through full asset divestment and market price deregulation

Answer

Ministerial control exercised through statutory supervisory powers and policy directives
The correct answer highlights ministerial control, which represents executive oversight over statutory public corporations. Even when public corporations operate on a commercialized basis or possess legal personality, the supervising Minister retains statutory authority to approve major tariff adjustments, issue general policy directives, and intervene in management decisions to protect public interest.

Step-by-Step Solution

1
Analyze the nature of the action and authority in the scenario
The action involves a supervising Minister voiding an unapproved tariff increase and suspending the board of a state-owned statutory enterprise.
Identifying the actor (Minister) and the mechanism of intervention isolates executive governance from judicial or parliamentary mechanisms.
2
Distinguish ministerial powers from other forms of public corporation control
Enabling acts mandate that major operational decisions (such as price hikes or structural borrowing) require ministerial approval, allowing cabinet ministers to issue policy directives and alter board leadership.
Public corporations enjoy operational autonomy, but remaining accountable to the public via the cabinet minister ensures policy alignment.

Key Concept

Ministerial Control over Public Corporations
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Topics

Public Corporations: Organization, Commercialization, Privatization, and Control

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