After Independence in 1947, the founding fathers envisaged a mixed economy for India, assigning an effective and dominant role for public sector enterprises of the country. During the 1950s and 1960s, India witnesses a massive expansion of public sector through new units and nationalization of existing units. Started with great fanfare, public enterprises were soon afflicted with various ills like over-staffing, labour indiscipline, under-utilisation of installed capacity, excessive political interference, bureaucratic instead of professionalised management, and undue emphasis on capital-intensive technology. The poor performance of PSEs started to be reflected in low profits and in some cases mounting losses year after year. Hence, privatization of public sector enterprises is a part of the economic reforms process initiated in 1991. In dismantling the public sector, India has adopted a gradualist approach. The slow pace of privati-sation has disappointed the public in general. This book traces the philosophy and growth of PSEs in India and describes recent policy measures for their privatization. Hurdles being faced by the Government in this gigantic task are also set forth.
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