ABSTRACT
The simplest method is to treat the enterprise like an ‘ordinary’ agency. It draws up its estimates for the coming financial year, the requisite amounts are appropriated in the normal way, and the usual financial controls are imposed on disbursements, without distinction between capital and operational expenditure. Similar objections apply to the direct financing of enterprises such as development corporations from the surpluses of marketing agencies. A possible alternative to direct budgetary financing is the creation of a government-owned Development Bank, to make loans to enterprises from (a) government-provided funds, (b) the profits of its operations, such as the interest it receives on its advances, and (c) the deposits that may be lodged with it by members of the public, in the course of the ordinary commercial banking business it may be authorised to conduct. A financially-successful public enterprise can contribute towards capital formation in several different ways.
