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Committee on Public Undertakings

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Committee on Public Undertakings

The Committee on Public Undertakings is one of the three major Financial Committees of the Parliament. It exercises parliamentary oversight over the functioning and financial performance of Public Sector Undertakings (PSUs) falling within its jurisdiction.

The Committee examines whether the affairs of public undertakings are being managed in accordance with sound business principles and prudent commercial practices, while also examining relevant reports of the Comptroller and Auditor General of India (CAG).

Genesis of the Committee on Public Undertakings

  • The Committee on Public Undertakings was constituted in 1964.
  • It was created on the recommendation of the Krishna Menon Committee. 
  • Initially, the Committee consisted of 15 members:
    • 10 members from the Lok Sabha
    • 5 members from the Rajya Sabha
  • In 1974, its membership was increased to 22 members, comprising:
    • 15 members from the Lok Sabha
    • 7 members from the Rajya Sabha
  • The creation of a separate Committee on Public Undertakings provided Parliament with a specialised mechanism for scrutinising the functioning of public sector enterprises.

Constitution and Composition

  • The Committee on Public Undertakings consists of 22 members:
    • 15 members elected by the Lok Sabha
    • 7 members elected by the Rajya Sabha
  • Members are elected annually by the respective Houses from among their members according to the principle of proportional representation by means of the single transferable vote.
  • This system facilitates representation of different political parties in the Committee.

Term of Office

The term of office of members of the Committee is one year.

Ministers and Membership

  • A Minister cannot be elected as a member of the Committee on Public Undertakings.
  • If a member of the Committee is subsequently appointed as a Minister, the person ceases to be a member of the Committee from the date of such appointment.

Chairperson

  • The Chairperson of the Committee is appointed by the Speaker of the Lok Sabha from among the Lok Sabha members of the Committee.
  • Unlike the Public Accounts Committee, there is no established convention requiring the Chairperson of COPU to be from the Opposition.

Functions of the Committee on Public Undertakings

  • To examine the reports and accounts of the Public Undertakings specified in the Fourth Schedule to the Rules of Procedure and Conduct of Business in Lok Sabha; 
  • To examine the reports, if any, of the Comptroller and Auditor General of India on the Public Undertakings; 
  • 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 
  • To exercise such other functions vested in the Public Accounts Committee and the Estimates Committee in relation to public undertakings which are allotted to it by the Speaker from time to time

Matters Outside the Jurisdiction of the Committee

The Committee on Public Undertakings does not examine or investigate the following:

  • Day-to-day administrative matters of Public Undertakings.
  • Matters involving major government policy, as distinct from the business or commercial functions of Public Undertakings.
  • Matters for the consideration of which machinery is established by any special statute under which a particular public undertaking is established

Limitations of the Committee on Public Undertakings

The effectiveness of the Committee is limited by several factors:

  • It can examine only a limited number of Public Undertakings each year (generally around 10–12), leaving many undertakings outside its annual scrutiny.
  • Its examination is largely post-facto (post-mortem), as it reviews the functioning of undertakings after decisions and expenditure have already taken place.
  • Since its members are not technical experts, the Committee generally does not examine technical matters.
  • Its recommendations are advisory in nature and are not legally binding on the government or the concerned Public Undertakings.

Working of the Committee on Public Undertakings

  • The Committee selects, from time to time, Public Undertakings or specific subjects falling within its jurisdiction for detailed examination.
  • The concerned Ministry or Public Undertaking is required to furnish the necessary information, records and background material to assist the Committee in its examination.

Study Groups and Study Visits

  • For detailed examination of specific issues, the Committee may constitute one or more Study Groups.
  • Where necessary, the Committee undertakes on-the-spot study visits to projects, establishments or Public Undertakings. Before such visits, the concerned Ministry or Undertaking provides background notes and relevant documents to the members.
  • During these visits, the Committee holds only informal sittings. No formal evidence is recorded and no decisions are taken during these discussions.
  • The Committee may also interact informally with representatives of:
    • Chambers of Commerce and Industry
    • Non-governmental organisations
  • After considering the information collected through study visits, memoranda and other sources, the Committee invites official and non-official witnesses to provide evidence at its formal sittings, generally held in New Delhi.
  • All discussions held by the Committee with the representatives of the Undertakings/ Ministries/ Departments, non-official organisations, labour unions, etc. are  treated as confidential.

Submission of Reports

  • The Committee incorporates its observations and recommendations in reports, which are presented to both Houses of Parliament.

Action Taken Reports

  • After a report is presented, the concerned Ministry or Public Undertaking is required to take action on the Committee’s recommendations.
  • The Committee subsequently examines the government’s response through an Action Taken Sub-Committee/Committee and presents an Action Taken Report to Parliament.
Financial Committees of Parliament: Quick Comparison
FeaturePublic Accounts Committee (PAC)Estimates CommitteeCommittee on Public Undertakings (COPU)
Present strength223022
Lok Sabha153015
Rajya Sabha7No representation7
Minister can be a memberNoNoNo
Chairperson appointed bySpeakerSpeakerSpeaker
Main focusScrutiny of government accounts and expenditureEconomy and efficiency in budget estimatesFunctioning of Public Undertakings
Nature of scrutinyPrimarily post-expenditureExamination of estimatesPSU performance and accountability

Committee on Public Undertakings

Must Know
First Constituted1964
Present Strength 22 members
Lok Sabha Members 15
Rajya Sabha Members 7
Method of Election Proportional representation by means of single transferable vote
Term One year
Can a Minister Be a Member? No
Chairperson Appointed By Speaker of the Lok Sabha
Chairperson Chosen From Lok Sabha members of the Committee

FAQs

1. What is the Committee on Public Undertakings?

The Committee on Public Undertakings is a Financial Committee of Parliament that examines the functioning, accounts and financial performance of Public Sector Undertakings under its jurisdiction.

2. When was the Committee on Public Undertakings constituted?

It was constituted in 1964.

3. On whose recommendation was Committee on Public Undertakings established?

It was established on the recommendation of the Krishna Menon Committee.

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