Question

What are the essential features of Privatisation?

Options

• Disinvestment

• Establishing Board of Industrial and Financial Reconstruction

• Reducing the Role of Public Sector

• All of the above

Answer 1

All of the above

Explanation - 

Privatization in India was carried out in the following manner.

1. Disinvestment : The government used two methods for disinvestment. First, a portion of the PSU's equity will be sold, followed by a strategic sale of PSU's. A large portion of the equity in PSUs was sold to the private sector during privatisation. A number of companies, including Modem Foods India, Bharat Alluminium Company (BALCO), Maruti Udyog Ltd., and others, were also strategically sold.
2. Establishing Board of Industrial and Financial Reconstruction : This board was formed to help the sick and losing businesses recover.
3. Reducing the Role of Public Sector : Under privatisation, the number of industries that were exclusively reserved for the public sector was reduced considerably from 17 to 8. At present, only 3 industries are exclusively reserved for the public sector namely, railways, atomic mineral and atomic energy.
4. Navratna Policy: The government granted the status of 'Navaratnas' to nine high performing PSUs in order to improve efficiency, instil professionalism, and enable PSUs to compete effectively in the market.