The government, the minister concerned, and the Parliament interfere in the day-to-day working of these enterprises and due to this interference, it has become difficult for these undertakings to run on sound business principles. For managing the units efficiently, there is need to run them on business principles and further they should be given a large measure of autonomy in the day-to-day administration.

One of the methods adopted by the government to improve the management is to establish holding companies to take over the management of some public sector undertakings. The government has already established a holding company, Steel Authority of India Ltd. (SAIL), to administer the steel units in the public sector. It has already shown good results.