1Research Scholar, PAHER University, Udaipur, Rajasthan
2Prin. Welingkar Institute of Management Development and Research, Mumbai
Online published on 27 July, 2017.
This review is done to assess the various policy initiates/strategies adopted by different governments over several periods after the initial stages of decision to go for disinvestment of PSUs.
Public Sector Undertakings have been assigned a vital role in the development of Indian economy. PSUs were established to primarily to offset the basic necessity of unemployment and set up a socialistic pattern of society in the country.
Public sector was expected to be the guiding force for growth in the path of development. However, the public sector overgrew itself and its shortcomings started manifesting in under capacity utilisation and efficiency below par due to excess manpower, low work ethics, over capitalisation due to substantial time and cost over runs, lack of innovation, lack proactive approach to take quick and timely decisions, too much interference in decision making process.
Hence, a decision was taken in 1991 to follow the path of disinvestment and it is noticed that PSUs showed better performance in the post-reform period. The better performance can be viewed in terms of high productivity and reducing cost of production.
This was continued till now by various governments with some modifications due to political pressures, but the importance of disinvestment was accepted by all.
