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.