ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Macroeconomic Impact of Public Sector-Enterprises-Some Further Evidence

An analysis of the macroeconomic impact of public sector enterprises (PSEs) for 1960-61 to 1989-90 shows: (i) relatively little increase in their overall deficit compared to the sharp deterioration of the gross fiscal deficit and (ii) a steep decline in their budgetary dependence. While the PSEs' internal resources in financing their investment increased distinctly, the same for the private corporate sector declined, both converging to similar levels by the end of the 80s. A statistically significant trend increase in the PSEs' capacity utilisation is also discernible for 1978-79 to 1990-91. These results, strengthening our earlier findings, seem to question the implicit premises of the ongoing reforms of the public enterprise sector in India.

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