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Question

Explain the new approach of the Indian Government towards public enterprises.


Solution

The new approach of the Indian government towards public enterprises are as follows:

1. Privatization of public enterprises: In the recent years, the Indian government sold some of the public sector units to the private sector. There is a lot of opposition faced regarding conversion of public sector enterprises into private sector enterprises.

2. Disinvestment: This method is adopted by the government in order to increase the role of the private sector in a developing economy like India. The amount collected from disinvestment can be utilized by the government for socially desirable projects or for the repayment of loans borrowed from the IMF or World Bank.

3. National Renewal Fund: The National Renewal Fund was set up in 1992 with an objective to compensate the workers and voluntary retirement schemes are offered to them for their rehabilitation.

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