Birds Of Air India Feather

Context: Privatisation of the Public Sector Undertakings (PSUs) and challenges faced by the Government.

Challenges of Goverment in Privatisation of PSUs

• Weak architecture of the privatisation programme: There is a strong possibility of asymmetry between what the GoI puts on the table for sale and what the investor interests are.
• Lack of policy clarity - GoI is pursuing two tracks: Privatisation of PSUs and monetisation of assets.
  • Experience of many erstwhile communist regimes that transited to a market-based ecosystem had led to ‘oligarchy’.
• Long-drawn and tortuous process of privatization: AI privatization after long delays and fall in valuation.
• Politicisation of decision making: Government has two more years to push privatization agenda as the next set of elections are set for 2024.
  • Concerns of opposition will increase as the when it comes to profit-making PSUs.

Way Forward

• Efficiency and productivity gains shall be brought centre-stage in the discourse, as the end-objective of transfer of resources to private sector.
• Set up an empowered Disinvestment and Productivity Commission (DPC) to plan and execute the agenda, directly under PM.
• The states should also be incentivised to pursue an effective privatisation programme for whatever little is left of the termite eaten state enterprises.