| Departmental Organisation | Government Company |
| Meaning | The organisation which is owned, managed, controlled, financed and operated by Government is known as Departmental Organisation. | Government Company means company where minimum 51% of the paid up capital is held by the Central or State Government jointly or individually |
| Management | Departmental Organisation is managed by government officials of the concerned ministry. | Government Company is managed by Board of Directors appointed by government and shareholders. |
| Legal Status | There is no separate legal status distinct from the government. | A Government company has legal status separate from the Government. |
| Borrowing power | Departmental undertaking cannot borrow from public. It has to depend on budget allocated by the government. | Government companies can borrow funds by the way of debt or issuing shares to the public. |
| Control | Departmental Organisations is controlled by the concerned ministry. | These companies are controlled by government or shareholders. |
| Capital | Capital of the departmental Organisation comes from annual budget appropriations of the government. | The capital is contributed by the Central Government or State Government or even by general public and financial institution. |
| Formation | It is formed through Executive decision taken by the concerned ministry. | It is formed through registration under Companies Act, 2013. |
| Privileges & Concessions | It receives highest government concessions and privileges | It has no privileges and concessions by government. |
| Suitability | It is suitable for defence and public utility undertakings such as infrastructure projects, e.g. Railways, Post & Telegraph, Defence, etc. | It is suitable for industrial and commercial undertakings, e.g. BHEL, SAIL, HMT, Indian Oil Corporation, Indian Refineries, Madras Refineries, Gujarat Refineries, etc. |
| Staff | Employees appointed are Government servants. They are subject to the same discipline and enjoy the same privileges as meant for civil servants. | Employees can be recruited independently and it does not have to necessarily follow civil service rules. |
| Political Interference | It has high political interference with regards to the management. | As compared to departmental organisation it has less political interference. |
| Flexibility | It is rigid in operations as its managed through officers of the government. | It is more flexible in operations as managed by Board of Directors. |
| Motive | It is majorly concern with providing service to the people. | It is concern with giving with profit making and service to the people. |
| Accountability | Highly accountability to the respective the Minister in charge as they render their service. | Low accountability to the people as they render their service. |
| Autonomy | There is no autonomy as its owned, managed controlled, financed by government. | It has full autonomy as per provisions to Companies Act, 2013. |
