Privatisation of State Public Enterprises: Finance Commission Approach

This book disseminates the findings of research sponsored by the Tenth Finance Commission on rate of return in State Level Public Enterprises (SLPEs). The financial performance of these enterprises has an important bearing on the finances of the state governments. The present book classifies the SLPEs into three categories: commercial, commercial-cum-promotional and promotional SLPEs. The research develops a framework of targeted profitability. It then compares the existing state of profitability with the desirable state. As a corollary, an attempt has been made to study the state-wise profitability of the SLPEs. One interesting feature of the book is to compare the profitability of the similar and dissimilar SLPEs. Such an exercise highlights as to why some enterprises within a group fared better as compared to the other enterprises. The book contains a survey of privatisation trends in the various states and presents a case study of restructuring of SLPEs in Andhra Pradesh. The information contained in the book was collected through a questionnaire on individual SLPEs in the various states. Out of the total of 954 SLPEs, 875 responses were received from the various states. 79 SLPEs did not respond. The principal components of the data collected for a seven-year period related to turnover, net profits, capital employed, investment, and net worth. The data for the next eight-year period was forecast using the index numbers. The book contains very vital information in SLPEs including the state-wise portfolio, their classification, profitability intensity and their classification into core and non-core organisations. The book will be very useful to the policy makers, experts, consultants, researchers, government officials, and teachers and post graduate students of management, economics, public administration, commerce and political science.