Saket Dinkar@News Editor
Recently the nation has witnessed strike of work by employees of two important industries viz., Banking and Insurance against privaatisation moves initiated by the Governemnt. Privatisation means change of ownership. The Government owned company is taken over by a few individuals is called as privatisation in the case of privatisation of public sector enterprises the Privatisation of the public sector companies by selling off part of the equity of PSEs to the private sector is known as disinvestment. The main purpose of privatisation is providing strong momentum to the inflow of FDI and also to improve the efficiency of public sector undertakings(PSU’S) Independent India has elected mixed economy model, a perfectly closed model, for economic development. In a mixed economy model, both State and rich individuals will contribute to the nation’s economicgrowth. When we opened the economy in early 90’s, many reforms known as LPG Reforms were introduced. Independent India has achieved progress through Five year plans and huge investments were made in the capital intensive areas like telephone, electricity, heavy industry, roads, railways, airways etc and all the major industries are in the public sector. The main objective of these investments in public sector is service by Government to the public. For any economy privatisation is important as it creates jobs and builds a healthy competition in the market. It works for maximising profit by improving customer services and goods and the standard of services.
For the first time in the 2021 Union Budget the word ‘PRIVITISATION ” is used. In the year 1969, Government of India has nationalised 14 commercial banks with an intetion to include the poorman in the nation’s socio-economic development. The other objectives of Banks nationalisation include mobilisation of national savings and channelise them into productive purposes. After 70 years of independence our Banks which were nationalised to serve the nation are now surviving purely on Government support, whereas the private banks have made good inroads into the economy and established their stronghold. Our experience has shown that adopting to the changing times is difficult to the public sector giantsto survive. This will slowly push them back in the competition. The best example in the world of privatisation is of loss making British Airways. Soon after privatisation it turned into profits. With this success the British Government has further privatised many public sector companies in electricity, gas, railways and other areas. This has further shown that timely Government action will turn fortunes to the loss making public sector giants.
Now India wants to privatise some more industries and to pass on advantages of privatisation to the general public by mobilise the proceeds to the State. Indian situation is unique and we cannot compare ourselves with other countries. Because of availability of cheap educated labour force hiring and firing is easy for employers. Labour laws are teethless and about the enforcement agencies less said the better. Hence our employees want job protection and service security. This is mostly possible in public sector only.
The Government has categorically stated it wants to comeout of all areas of investment other than 4 Strategic sectors and investments in other state owned firms in other segments will be rationalised in terms of mergers, amalgamations and eventually be privatised. The said 4 strategic sectors are atomic energy, space and defence, transport and telecommunications, power, petroleum coal and other minerals and Banking, insurance financial services,. Privatisation has also introduced e-shopping and many on line players brought quality goods at huge discounts to the general public.
An important factor for the success of any Business activity is quick decision making to meet the unforeseen developments. Becasue of red-tapism certain delays are happening in PSUs. Privatisation increases