Disinvesment in India-Policies ,Procedures, Practices
For a long time, most nations-whether socialist or capitalist and whether industrialised or developing-consciously encouraged and set up public sector enterprises in order to variously remedy market failures, fight monopolies, facilitate economic independence and allow for planned development. However, in recent times, the trend has reversed completely and the emphasis is now on dismantling or reforming the public sector. These reforms have taken different forms in different countries.
In India the path chosen has been to first deregulate and liberalise the economy and then to privatise public sector enterprises. Debates have raged on since then on a range of questions: Whether reform of state-owned enterprises is necessary; the choice of strategy and method; and the social and economic consequences of such policies.
In this important study, the author has incisively analysed, from a theoretically informed perspective, crucial aspects of this topical issue. Among the important aspects he discusses are:
Disinvestment in India was part of a broader process of economic liberalisation. To get insights into the impact that new economic policies had on disinvested enterprises and the way in which these enterprises responded to them, Dr Naib provides a firm-level analysis through case studies of seven partly disinvested enterprises (SAIL, BHEL, IOC, ITI, BEL, BEML, NFL). Impact of post-reform policies on enterprises is analysed in terms of changes in market share, cost structure, profitability and work culture. The strategic response of these enterprises is examined in terms of cost reduction measures, change in product portfolio, restructuring, innovation and institutional arrangement for diagnosing environmental changes.
Since the issues discussed are of vital importance in deciding on macroeconomic policies and the path of economic reform that the nation has to ultimately take, this book will be invaluable for scholars and researchers in the fields of public finance, public management and political economy, for those involved in public and private sector management as well as for policy makers and students of economics.