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

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Preparing the Script for Privatisation

The privatisation of Air India marks the gradual erosion of the public sector and inclusive employment.

Privatisation and the Indian State

With a strong impetus towards privatisation, the current government has been pushing to reduce state ownership across most sectors. The last two years have specifically witnessed the dilution of ownership approach being replaced by a firm resolve to transfer control. This article closely examines the privatisation policy discussed in the previous two economic surveys (2019–20 and 2020–21) that point to the privatisation of all state-owned enterprises operating in non-strategic sectors. Reducing state ownership to the extent of transferring control to private hands for better performing state-owned enterprises is not a well-suited policy decision. It reflects a closer alignment of the government's objective with generating funds for bridging the fiscal deficit/debt gap, by sacrificing future profits for short-term capital gains. In contrast, the Indian CPSE performance revival plan must incorporate a more structured approach that involves segmenting firms into various categories according to past performance, future profitability, industry characteristics, and revival chances. The government should customise the choice of restructuring plan according to these categories and segments.

Social Choice and Political Economy of Health

The National Health Policy, 2017 can be credited for an alternative vision towards the development of the health sector in India, but it falls short of expectations on certain counts. The core idea of strategic purchasing from the private sector is relevant, but can be incompatible with the existence of a robust public sector, particularly when reforms for enhancing the competitiveness of the public sector are undermined. Thus, the NHP essentially reopens the fundamental debate regarding the role of social choice mechanisms while deciding upon policy instruments and desirable outcomes. This has profound implications for the political economy of the health sector and can unintentionally catapult health as a salient feature in electoral politics.

Insights into Privatisation

Privatisation in India: Challenging Economic Orthodoxy by T T Ram Mohan; RoutledgeCurzon, New York, 2005; pp 213, price not mentioned.

Calcutta Diary

Unchanging India, and even the World Bank has now joined the troupe of excuse-mongers: India has been unable to reap the full advantages of liberalisation because of natural calamities that have befallen the country. Suppose some dull character were to ask whether the entire point of development was not to extricate the economy from the vicissitudes of nature, what answer would the mandarins, including the foreign ones, provide?

Partial Divestiture and Performance of Indian Public Sector Enterprises

Global empirical studies of privatised firms show a significant improvement in their performance after privatisation. This is true in case of fully as well as partly privatised firms. What is the evidence for Indian divested enterprises in this regard? This paper attempts an analysis by empirically examining the impact of divestiture. The results indicate that in case of partial divestiture, where divested equity is thinly spread with the majority shareholding still with the government, there has been no improvement in terms of profitability and operational efficiency. The paper therefore endorses the government's current policy of strategic sale, where management control passes to the strategic partner.

Public Sector Textile Mills

A review of the productivity performance of the National Textile Corporation in Tamil Nadu and Pondicherry presents a disturbing picture of poor capacity utilisation, outdated technology and machinery, poor maintenance and excess humanpower. The situation calls for drastic restructuring to improve the economic viability of the Corporation

Calcutta Diary

If disinvestment boils down to a network of arrangements which enables those close to the centre of power to make mindboggling profit on their money, while the rest of the species are condemned to a paltry profit, none amongst the latter will be agreeable to graze in the village common any more; about everyone who has the animal instinct implanted in him or her will try to cultivate the appropriate contacts.

Perils of a Self-Serving Bureaucracy

This article suggests that without diverting expenditures from large-sized, overstaffed establishments the government will not be able to address the problems of corruption and incompetence in the public sector. The lack of clarity on the role of government and an over-extended regulatory framework also act as a brake on private sector investment and production.

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