promoting privatisation is the objective of new economic policy. discuss also state the measure to take promoter privatisation
Answers
Explanation:
Privatization in India
In 1991 India made some major policy changes in their economic ideologies. There were stagnation and slow growth in the economy.
To tackle these problems the, then Finance Minister Dr. Manmohan Singh introduced some major economic reforms. Now, we call it the liberalization of the Indian Economy and the LPG reforms.
Privatization has a very broad meaning in economics. Everything that ranges from the introduction of private capital to selling government-owned assets to transitioning to a private economy.
As the definition of privatization is so very diverse let us take a look at the three main features of privatization.
Ownership Measures: The ownership of all public enterprises ultimately shifts to private owners. The denationalization can be complete or partial.
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.
Operational Measures: Public organizations and companies were running into huge losses. So the efficiency of these companies was to be increased.
Conceptualization of Privatization in India
1] Delegation: Here via a contract or franchise or lease or grant etc. the government keeps the ownership and the responsibility of an enterprise.
But the private company will handle the daily activities and deliver the product or service. The state will remain an active participant in this process.
2] Divestment: The government will sell a majority stake of the enterprise to one or more private companies. It may keep some ownership but will be a minority stakeholder in the enterprise.
3] Displacement: The first step here will be deregulation. This will allow private players to enter the market. And slowly and gradually the private company will displace the public enterprise.
Answer:
- The goal of the new economic strategy is to encourage privatization.
- Privatization includes increasing the involvement of the private sector while decreasing the role of the public sector.
- It might also imply the de-reservation of traditionally public-sector-only industries.
- The word privatization can broadly include reductions in the welfare state while also boosting entrepreneurial and deliberate activity.
- According to more specific definitions, privatization entails the use of a private workforce in place of a group of publicly elected officials to carry out a defined task.
- Privatization is presented as a political benchmark by Priest and Green (1995).
- In 1978, a strategy archive set up for the opposition Conservative party at the time in England suggested express auctions as a viable strategy for reducing the force of public areas.
- The authors hypothesized that these organizations took advantage of business and administrative opportunities that had been denied before privatization by analyzing the privatization that took place in the UK during the 1980s and 1990s and the circumstance of companies moving to serious business sectors.
- Since the 1980s, first in the UK and gradually extending during the years that followed.
- The State transfers its resources and patrimonies to the private sector to reduce its economic resource base and concentrate on the ostensible features of the State.
- This strategy differs from temporary privatization in that it contracts out open interests and is semi-permanent.
#SPJ2