Departmental undertakings are those public sector I enterprises which are the part of the Govt, only having no separate entity and which functions under the overall control of one of the ministries of central or state govt. For e.g., Railways, Defence, etc. The merits are:
1.Effective control of parliament :These undertakings ensure effective control over their operations by the parliament. Annual reports of the undertakings are laid on the table of both the houses of the parliament. Hence parliament can effectively ensure the efficiency-of these undertakings.
2.Public accountability : These undertakings are established for some specific work of the ministry. Sometimes government reviews the working of these undertakings through government audit. Hence they provide a high degree of public accountability.