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Reform and Privatization of State-Owned Enterprises in India

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Reforming State-Owned Enterprises in Asia

Part of the book series: ADB Institute Series on Development Economics ((ADBISDE))

Abstract

Privatization is a broad concept in economics. It comprises various operations, such as the introduction of private capital, the selling of government-owned assets, and transition to a private economy. Consequently, three major attributes of privatization are as follows: (1) ownership measures, (2) organizational measures, and (3) operational measures. Ownership measures refer to the transformation of the ownership of public enterprises to private owners. Organizational measures relate to the limitation of the state control in public companies. These involve the employment of methods for the leasing and restructuring of the enterprises. Operational measures concern the way to improve the profitability and efficiency of public enterprises.

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Notes

  1. 1.

    India’s first Prime Minister, Jawaharlal Nehru, presented the First Five-Year Plan to the Parliament of India, and it needed urgent attention. The First Five-Year Plan, which the government launched in 1951, mainly focused on the development of the primary sector.

  2. 2.

    David Sime Cargill founded the company as the Rangoon Oil Company in Glasgow in 1886 to develop oil fields on the Indian subcontinent. In the late 1890s, it passed into the ownership of Sir Campbell Kirkman Finlay, whose family already possessed vast colonial interests through their trading vehicle James Finlay and Co. It played a major role in the oil industry on the Indian subcontinent for about a century through its subsidiaries and in the discovery of oil in the Middle East through its significant influence over British Petroleum. It marketed itself under the BOC brand in Myanmar, Bangladesh (formerly East Pakistan), and Assam (in India) and through a joint venture, Burmah–Shell, with Shell in the rest of India.

  3. 3.

    The tea industry in Assam is about 172 years old. It occupies an important position and plays a very useful part in the national economy. Robert Bruce, in 1823, discovered tea plants growing wild in the upper Brahmaputra Valley. In 1859, the second most important tea company, the Jorhat Tea Company began operation.

  4. 4.

    Government of India. 2011. Public Enterprises Survey 2009–10. New Delhi.

  5. 5.

    Liberalization is any process whereby a state lifts restrictions on some private individual activities.

  6. 6.

    Government of India. 1993. Report of the Committee on the Disinvestment of Shares in PSEs (Rangarajan Committee), April. New Delhi.

  7. 7.

    Air India is the flag carrier airline of India with headquarters in New Delhi. It is owned by Air India Limited, a government-owned enterprise, and operates a fleet of Airbus and Boeing aircraft serving 94 domestic and international destinations. The airline has its hub at Indira Gandhi International Airport, New Delhi, alongside several focus cities across India.

  8. 8.

    Government of India. 2007. White Paper on Disinvestment of Central Public Sector Enterprises. New Delhi: Department of Disinvestment.

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Author information

Authors and Affiliations

  1. Public Institutions Reform Division, Ministry of Strategy and Finance, Sejong, Republic of Korea

    Kunmin Kim

  2. Department of Business Administration, Annamalai University, Chidambaram, India

    N. Panchanatham

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  1. Kunmin Kim
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  2. N. Panchanatham
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Correspondence to Kunmin Kim .

Editor information

Editors and Affiliations

  1. Social Science Research Institute, Tokai University, Hiratsuka, Kanagawa, Japan

    Farhad Taghizadeh-Hesary

  2. Keio University, Minato-ku, Tokyo, Japan

    Naoyuki Yoshino

  3. Asian Development Bank Institute, Chiyoda-ku, Tokyo, Japan

    Chul Ju Kim

  4. Public Institutions Reform Division, Ministry of Strategy and Finance, Sejong, Korea (Republic of)

    Kunmin Kim

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Kim, K., Panchanatham, N. (2021). Reform and Privatization of State-Owned Enterprises in India. In: Taghizadeh-Hesary, F., Yoshino, N., Kim, C.J., Kim, K. (eds) Reforming State-Owned Enterprises in Asia. ADB Institute Series on Development Economics. Springer, Singapore. https://doi.org/10.1007/978-981-15-8574-6_8

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  • DOI: https://doi.org/10.1007/978-981-15-8574-6_8

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  • Publisher Name: Springer, Singapore

  • Print ISBN: 978-981-15-8573-9

  • Online ISBN: 978-981-15-8574-6

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