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GOODGOOD MORNINGMORNING

ALL OF YOUALL OF YOU

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PUBLIC SECTOR

REFORMS

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DISINVESTMENT

PROGRAMME

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CONTENTSCONTENTS

PUBLIC SECTOR REFORMS

INTRODUCTION TO PUBLIC SECTORREFORMS..WHAT IS PUBLIC SECTOR..???PROBLEMS FACING PUBLIC SECTOR/

REASONS FOR PRIVATISING PSUSPUBLIC SECTOR REFORMSOBJECTIVES OF PUBLIC SECTOR

REFORMS

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DISINVESTMENT PROGRAMME

DISINVESTMENT TRENDS SINCE 1991

PRESENT DISINVESTMENT POLICY OR

WAYS OF DISINVESTMESNT

MAJOR ISSUES CONCERNING

DISINVESTMENT PROGRAMME

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PUBLIC SECTORPUBLIC SECTOR

REFORMSREFORMS

The basic design of reforms can be seenin industrial policy 1991. The Basicthrust of public sector reforms has been

to attain sharp focus, improveefficiency & profitability & grant greaterautonomy to public sector units so as toenable these institutes to work oncommercial & professional lines..

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WHAT IS PUBLICWHAT IS PUBLIC

SECTOR???SECTOR???STATE BANK OF INDIAORIENTAL BANK OF COMMERCEINDIAN OILONGCPUNJAB NATIONAL BANKHINDUSTAN PETROLEUM

CORPORATIONBHARAT PETROLEUM CORPORATIONBHARAT HEAVY ELECTRICALS(BHEL)

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In simple words, PUBLIC SECTORUNITS refer to the industrial institutionswhich are managed & controlled by

state or central govt.

Prior to 1947 there was no public

sector in Indian economy. Therewere only few state managedundertakings like

Government salt factories, quinine

factories..etc.

After independence, India adoptedmixed economyas its economicsystem.

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Public sector includesfollowing:

Government departments &Government companies both inCentral & State sectors..,

Irrigation & power projects..;

Railways, Post & telegraphs, ordnance

factories & other departmental units;

Banking, insurance, financial & otherservices

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Within this public sector , the focus ismainly on central PSUs which have thefollowing three broad organizationalforms:

DEPARTMENTAL UNDERTAKINGS

JOINT STOCK COMPANIES (reg. undercompanies act)

STATUTORY CORPORATION

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PROBLEMS FACINGPROBLEMS FACING

PUBLIC SECTORPUBLIC SECTOR

BUREAUCRATISATION , RED TAPISM ORPOLITICAL INTERFERENCES

PROBLEM OF LOSSES OR LOW RATE OFRETURN ON INVESTMENT

LACK OF PROFESSIONALISM INMANAGEMENT

UNDER UTILISATION OF CAPACITY

OPERATIONAL INEFFICIENCY

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PUBLIC SECTORPUBLIC SECTOR

REFORMSREFORMS

The growing pressure of criticism againstpublic sector within the governmentcircle & private industry has led toseries of reforms including

disinvestment..OBJECTIVES :RESTRUCTURING OF PSUS

IMPROVEMENT IN PERFORMANCE OFPSU SOCIAL WELFARE PROFIT MOTIVEQUALITY HUMAN RESOURCE

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DISINVESTMENTDISINVESTMENT

PROGRAMMEPROGRAMME

Disinvestmentis generally expected toachieve a greater inflow of privatecapital and the use of privatemanagement practices in PSUs, as wellas enable more effective monitoring ofmanagement discipline by the private

shareholders. Such changes would leadto an increase in the operationalefficiency and the market value ofPSUs.

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DISINVESTMENT TRENDSDISINVESTMENT TRENDS

SINCE 1991SINCE 1991 Disinvestment programme towards

greater privatisation of economy waslaunched in 1991-92 with announcementof industrial policy 1991 & is on-going

process even today. Under the programme, the govt has been

setting targets from year to year & hasbeen resorting to diff methods &

strategies to attract private investors. Between Aug 1991 & Mar 2003, in all 48

companies underwent disinvestmentprocess.

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PARTIAL/FULLPARTIAL/FULL

DISINVESTMENT HAS BEENDISINVESTMENT HAS BEEN

MADEMADE Shipping credit &

investment

corporation ofIndia

VSNL

ONGC

GAIL SAIL

Indianpetrochemicals

corporation Ltd.

Maruti udyog Ltd.

Power grid

corporation NFL

Indian Airlines

NALCO MTNL

Madras refineriesLtd.

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CONCERNINGCONCERNING

DISINVESTMENTDISINVESTMENT

PROGRAMMEPROGRAMMEVALUATION OF PSUS

METHOD OF DISINVESTMENT

EXTENT OF DISINVESTMENT

UTILISATION OF DISINVESTMENTSPROCEEDS

ISSUES CONCERNING LABOUR

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CONCLUSIONCONCLUSION

The Disinvestment of PSUs is not favored inIndia. The reasons being: The disinvestment programme is criticised

on ground that what the govt has

collected over the years as states assetshas been now put up for sale. No one is buying sick PSUs, all efforts are

going to be directed towards selling

Healthy ones. Disinvestment is hardly making any

impact on physical & financialperformance of PSUs..

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