Project report

on

Illustrates of 'Financial Management' In public areas Sector Companies

CONTENTS

1 . Introduction

installment payments on your Highlights of economic management in public areas sector companies - Budgets in Public Sector

- Revised Budget

-- Sources of Funds in Public Sector

- Role of Financial Consultant

- Capital Budgeting

-- Working Capital Administration

- Economic Delegation

-- Financial Reporting

- Profitability of Central Public Sector Undertakings

3. Role of economic management in the reforming of psu's

-- Performance Analysis in PSU's

- Value of Open public Sector Commencing

- Valuation Techniques

- Pricing in Acquisitions

- Disinvestment

four. SWOT analysis of financial managing in psu's

5. Conclusion

INTRODUCTION

A public sector undertaking could possibly be defined as an enterprise undertaking, which is owned maintained and controlled by the State, on behalf of public at large. These undertakings have come to enjoy a unique location in the Of india economy inside the post independence era. They've been responsible for building a strong industrial base and providing the basic infrastructure for development in the country. From an investment in 5 enterprises of Rs. up to 29 crores in 1950-51. Expense in 242 Central PSUs has gone up to a staggering Rs. 2 . 04. 054 crores, the net revenue they made was just Rs. 13. 725 crores -a come back of six. 7 percent only.

The implicit assumption in the growth of PSU in the early stages is that public sector would conduct the role of a pathfinder and produce necessary infrastructural facilities but not be over- concerned about profits or ecart. This yet , subsequently, offered way towards the view that even as externalities are important just as, profitability was also a valuable guide and self- disciplinary measure.

In regards to the area and nature of job within Financial Managing, there is mostly no significant difference in a private sector or maybe a public sector organisation. However , since the community sector deals with and greatly relies on taxpayer's money, the principles, procedures and checks to get accountability with this money are comparatively more rigid than that inside the private sector.

HIGHLIGHTS OF 'FINANCIAL MANAGEMENT' IN PUBLIC SECTOR UNDERTAKINGS

FINANCES IN PUBLIC SECTOR

The budget physical exercise in public sector is accomplished in a similar manner such as the exclusive sector. The Budget Section of the Accounts & Finance Section is generally accountable for coordinating the budget exercise, collecting data coming from all departments/divisions concerned and finalizing the budget for demonstration to the Board of Directors.

The budget is definitely prepared on such basis as 'Zero based budgeting' principle. In other words, yearly the revenue and expenses, including capital expenditure, happen to be estimated without the reference to days gone by event or perhaps amount. To put it differently, under 'Zero based budget' concept income and spending are predicted from scratch or afresh based only in targets started be achieved through the ensuing season as broadly determined by the Board of Directors and also the Management Panel.

The budget given the green light by the Board of Owners forms the foundation for all spending and yardstick for income earning. Simply no expenditure may be incurred unless it is contained in the budget. Similarly, the earnings target emerge the budget needs to be achieved, which, at times, in addition to many public- sector products, are not fulfilled. This happens primarily for the reason that production and revenue goals are not estimated realistically.

Under such a scenario, Financial Managing in a community sector device attains a tremendous dimension. It really is observed there is a general tendency of spending following the budgeted pattern (except expenses straight varying with production or sales such as consumption of raw material, overtime of workers, offering commission, and so forth ) whereas revenue diminishes from the budgeted target. As a result, mismatching of inflow and outflow is actually a paramount issue for a general public sector...