dc.description.abstract |
The last few years have seen more and more countries opting for privatization.
The international financial institutions have also been favouring it as part of their
structural adjustment programme for specific countries. After the macroeconomic
crisis of 1991, India too initiated certain refonns aimed at reducing the level of
state intervention. This dissertation seeks to examine whether these changes
denote a genuine move towards privatization or not, and whether such a policy
would be sustainable, given the economic, political and social compulsions that
the country faces.
The dissertation seeks to explore the concept of privatization, its rationale and
consequences and then look at privatisation in developed as well as developing
countries. It will examine thereafter the developmental strategy adopted by India
since her independence leading to the growth of the public sector, the
macroeconomic crisis of 1991 and the policy changes that have taken place since
then.
The study will show that while after 1991 the Government has been forced to cut
down on the level of state intervention, it has followed a cautious approach and
not gone in for large-scale privatization. On the contrary, the emphasis has been
more on deregulation than on actual disinvestment. It will show that the
disinvestment carried out so far has not only been marginal, but the proceeds have
gone towards reducing the fiscal deficit of the government instead of rejuvenating
the public sector enterprises. While wholesale privatisation may not be a
preferred option keeping in view the huge investments made so far as well as the
social tensions such a step would engender, some sort of rolling back of the
government's activities would appear inevitable.
The study will conclude that as the government's resources dwindle, there is
bound to be greater dependence on private financing for new projects and for
infrastructure development. This would be partly met from domestic sources and
partly from foreign investment. There would be a tendency to allow the private
sector into areas that were earlier reserved for the public sector. There would also
be a withdrawal from areas that are perceived as better managed by the private
sector.
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