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Report No. 145

5.2. Arguments favouring the amendment: business principle.-

Broadly speaking, the major ground on which the case for amendment of Article 12, so as to exclude public sector undertakings from the scope of the Article, is the argument that if public sector enterprises are to function on business lines and to be allowed the largest measure of freedom, then an interpretation of Article 12 of the Constitution that brings such undertakings within the concept of "State" for the purposes of fundamental rights creates serious difficulties in regard to the functioning of those enterprises on commercial and industrial lines. In this connection, attention has been drawn to rule 312A of the Rules of Procedure and Conduct of Business in the Lok Sabha which (so far as is material) reads as under:-

"312A. There shall be a Committee on Public Undertakings for the examination of the working of the public undertakings specified in the Fourth Schedule. The functions of the Committee shall be:-

(c) to examine, in the context of the autonomy and efficiency of the public undertakings, whether the affairs of the public undertakings are being managed in accordance with sound business principles and prudent commercial practices; and

Article 12 of the Constitution and Public Sector Undertakings Back

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