Privatisation in India - Challenging Economic Orthodoxy

Privatisation in India - Challenging Economic Orthodoxy

Product ID: 18257

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Author: T T Ram Mohan
Publisher: Routledge
Year: 2005
Language: English
Pages: 218
ISBN/UPC (if available): 0415331919


Over the past decade India has been undertaking a programme of economic reform, and at the same time the economy has been growing at a high rate. As part of the reform programme, and in line with prevailing economic thinking. India has been privatizing its large, ungainly public sector. One assumption underlying this programme is the dogma that public-sector enterprises are doomed to inefficiency, and that only through privatization can their efficiency be improved.

But is this really true? Combining rigorous data analysis with case studies to provide a balanced evaluation of the process of deregulation and privatization within the overall context of economic reforms, the author demonstrates, remarkably, that, contrary to the prevailing view, private-sector firms do not outperform public-sector firms across all sectors. He argues that the dominance of family businesses, rather that professionally managed firms, and the level of corporate governance are important constraints on the privatization process in India.

He also shows that revenue-raising considerations have weighed more heavily with the government than efficiency objectives. Broad based shareholding of public-sector firms, not sale to private groups, should, therefore, be the preferred route to enhancing efficiency at public sector firms.


Prof Ram Mohan’s book makes fascinating reading, it is seldom that we come across a book on a contentious subject exhibiting such objectivity, scholarship and command over detail: this is one such book.
-Dr Y V Reddy, Governor, Reserve Bank of India


List of Figures

List of Tables

List of Appendices




List of Abbreviations

1. Introduction
2. Privatisation: Theory and Evidence
3. Comparison of performance in industry and study of impact of privatization, using financial measures
4. Comparison of performance in industry, using input-output quantities
5. Performance of public- and private-sector banks in India and the impact of privatization
6. Method of sale: is strategic sale the best option?
7. Governance and privatization
8. China’s privatization: a synoptic view
9. Summary and implications for privatization policy