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    The public sector is at the cross roads ever since the launch of economic reforms programme in India. The pendulum has been swinging between survival and surrender. It is the result of a confluence of several factors: a shift in global economic environment, the emergence of the market economy and myths surrounding the performance of the public sector. So virulent has been the onslaught that it is becoming axiomatic that by the very concept, the public sector is inefficient and resource waster whereas private enterprise is resource efficient.

    The reform programme in India commenced with the policy of restricting the public sector supported by greater public participation. With the passage of time, the process of liberalization has shifted to privatization in a disguised form couched as strategic role. In the wake of the recent hot pursuit of the wholesale privatization programme a lively and poignant debate has emerged. It provides a golden opportunity to introspect and revisit the issue. At the very outset, it must be made clear that in the worldwide liberalized economic environment and very high stake of the state in most public sector undertakings disinvestment policy seeks to differentiate closed or bankrupt enterprises from the private sector, a fact deliberately overlooked by the champions of privatization. These undertakings need immediate attention.

    They are an unnecessary drain on the public exchequer. A high priority area for the disinvestment programme ought to be these enterprises but under one or the other argument these remain unattended, may be it involves a tough task. If these cannot be sold lock, stock and barrel asset stripping is the only option. Obviously the government cannot realise good price from these assets but their disposal will help to stop the drain. If the assets are depreciated or become obsolete, then there is no point in holding on to them indefinitely and take to softer option of selling the vibrant and highly profit-making organisations to reduce the budgetary deficit. Non performers exist both in public and private sectors.

    Why condemn the public sector as a whole? Better option will be closure or privatization of loss-making and nonviable units, supporting PSU’s which could be turned around and made to become healthy and viable and providing autonomy to the boards of PSU’s which are performing well and have potential to be globally competitive be welcomed. With public participation in the PSU’s there will be a good dose of accountability in the system. What needs to be reviewed are some basic issues: the priorities allocated to the enterprises selected for disinvestment, a .comprehensive road map delineating the route, the modes and modalities, timing and its consequences. These basic issues require greater discussion and participative decision-making. In any event, the disinvestment programme in respect of the closed and non-revivable units is a must if the drain of further resources is to be prevented.

    Let it be understood that PSU’s are a big repository of value and it will take quite some time for privatization programme to materialise despite the desire to expedite the process. Until then if a vacuum emerges attended by uncertainty, it will do a great harm to the investments which were made with such great dedication although desired now. The government has withdrawn a budgetary support over the last decade. If some support is extended, it is largely directed to closed or losing enterprise which have no fortune.

    What were made with great dedication earlier, but now derided?

    Options :-

    1. Disinvestment
    2. Investments in PSUs
    3. Wholesale privatisation programme
    4. Strategic plans
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