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Privatisation : Experiment To Boost Economy ?

                     Meaning of Privatisation

It means a transfer of ownership, management, and control of public sector enterprises to the private sector.





As the definition of privatization is so very diverse let us take a look at the three main features of privatization.

  1. Ownership Measures: The ownership of all public enterprises ultimately shifts to private owners. The denationalization can be complete or partial.
  2. Organizational Measures: This is where we limit the control of the state in public companies. Some methods include holding company structuring, leasing. restructuring of the enterprises etc.
  3. Operational Measures: Public organizations and companies were running into huge losses. So the efficiency of these companies was to be increased.



PUSH OF PRIVATISATION IN ANNUAL BUDGET 2020-21:
The government will maintain a bare minimum presence in only four strategic sectors, Finance Minister Nirmala Sitharaman said in her budget speech. The four sectors are

  1. atomic energy, space, and defense;
  2. transport and telecommunications;
  3. power, petroleum, coal, and other minerals
  4. banking, insurance, and financial service
She said,

“In four areas, a bare minimum number of firms will be retained and the rest will be privatized. In other sectors, all firms will be privatized,” 

The list comprises public sector banks (PSBs) and insurance companies and will be its first following the government's ambitious drive to privatize PSUs, as announced by Finance Minister Nirmala Sitharaman in Budget 2021. This would clear the way for the Centre to go ahead with its Rs 1.75 lakh crore disinvestment target for the next financial year.

COMPANIES  SHORTLISTED FOR  PRIVATISATION IN BUDGET 2021:

  1. Bharat Petroleum Corp Ltd,
  2. Air India, Shipping Corporation of India,
  3. Container Corporation of India, IDBI Bank,
  4. Bharat Earth Movers Ltd, 
  5. Pawan Hans
  6. bank-The four banks on the shortlist are 
    Bank of Maharashtra
     , 
    Bank of India
    , 
    Indian Overseas Bank
     and the 
    Central Bank of India
    , two officials told Reuters on condition of anonymity as the matter is not yet public.

PROS AND CONS OF PRIVATISATION:



Does Privatization Make Sense?

Whether privatization makes sense or not is not easy to answer. There are so many factors that play a role in this discussion and all the pros and cons of privatization have to be evaluated on an individual basis.

Only then will it be possible to make profound decisions that can benefit the general public in the long run.

written & published by:

Rahul pradhan

smith pandya

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