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Conceding to the demands of privatization , the Government of India slowly began the divesting itself from PSU's despite stiff resistance from labour unions. The below table provides data regarding the disinvestment process which started in barring 2 small units being CMC Limited and Patherele Concrete.
While track record and future of these companies were good, they have all flourished under the private sector companies that they were sold to. She also stated that in strategic sectors, the number of PSU's will be limited to 4. In strategic sectors with more than 4 PSU's, the government will privatize, merge or consolidate the PSU's under holding companies in order to reduce wasteful administrative costs. Nirmala Sitharaman stated that there is a need for a coherent policy where all sectors are open to private sector participation while PSU's play an important role in defined areas.
In recent years, certain public sector undertakings performed reasonably well and paid significant dividends to the government,  whereas other PSU's such as Air India , BSNL , and MTNL made huge losses, costing the taxpayer massive amounts of money. From Wikipedia, the free encyclopedia. This article needs additional citations for verification. Please help improve this article by adding citations to reliable sources.
Unsourced material may be challenged and removed. Retrieved 22 April The Government made a significant change in disinvestments, it was the same government that used the expression " Privatization " in place of disinvestment for the first time. The policy of the NDA government was to strengthen the PSUs in strategic sectors by privatizing non-strategic companies.
The government focussed on the privatization of the non-strategic PSUs up to 26 percent or lower if needed. The UPA government in first among many other decisions taken discontinued the process of the "Strategic sale" policy of earlier NDA; and particularly minority stake was auctioned in some PSUs. While disinvestments in India have been practiced, largely by transferring a limited extent of equity to a private entity and not by carrying out a complete transfer of ownership of the PSUs.
Sudhir Naib in his book titled Disinvestment in India: Policies, Procedures, Practices writes, "the government has gradually moved from disinvestments to privatization. Hence, the author notes: it is not the size of the disinvestment that improves efficiency, but the change in leadership of the company and other market driving factors like innovation, technology, administrative intervention which affects the economic efficiency. As the process of disinvestment dilutes the state's ownership in PSUs, some scholars have observed, various political factors could also develop into an obstacle in dealing with disinvestment policies.
The study also hypothesized, the more center and state cohesion in ideologies, the prospects of disinvestments improve significantly. Resulting in their reliance on outside support from Left-leaning parties like CPI-M, which caused the government to confront many challenges as both the parties had differing ideologies on distinct issues.
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Retrieved 7 May Retrieved 10 May Vision: The Journal of Business Perspective. Retrieved 11 May Pacific Affairs. New Age International P Limited. The case of privatization in India". The Case of Privatization in India. Journal of Economic Policy Reform. Strategic Studies. Hidden categories: CS1 errors: missing periodical Orphaned articles from August All orphaned articles Wikipedia articles in need of updating from May All Wikipedia articles in need of updating Articles with multiple maintenance issues Use dmy dates from August Use Indian English from February All Wikipedia articles written in Indian English.
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