The funding of ...........................enterprise come directly from the Government Treasury and are an annual appropriation from the budget of the Government.

Departmental undertaking

The correct answer is option 2- Departmental undertaking.

Departmental undertaking is the oldest and most traditional form of organising public enterprises. These enterprises are established as departments of the ministry and are considered part or an extension of the ministry itself. The Government functions through these departments and the activities performed by them are an integral part of the functioning of the government. They have not been constituted as autonomous or independent institutions and as such are not independent legal entities. They act through the officers of the Government and its employees are Government employees. These undertakings may be under the central or the state government and the rules of central/state government are applicable. The main characteristics of Departmental undertakings are as follows:

(i) The funding of these enterprises comes directly from the Government Treasury and are an annual appropriation from the budget of the Government. The revenue earned by these is also paid into the treasury;

(ii) They are subject to accounting and audit controls applicable to other Government activities;

(iii) The employees of the enterprise are Government servants and their recruitment and conditions of service are the same as that of other employees directly under the Government. They are headed by Indian Administrative Service (IAS) officers and civil servants who are transferable from one ministry to another;

(iv) It is generally considered to be a major subdivision of the Government department and is subject to direct control of the ministry;

(v) They are accountable to the ministry since their management is directly under the concerned ministry.