Following reforms were introduced in the Industrial Policy, 1991 for the public sector.
1. Dereservation: In 1991, only 8 industries were reserved for the public sector which included arms and ammunition, defence, atomic energy, mining and railways. All other sectors were opened for the private sector to participate in.
2. Disinvestment of Public Sector Enterprises: This process involved the selling a portion of equity or controlling stock to the general public and private sector. The motive behind such a decision was to encourage participation of private enterprises and general public for ownership of the public enterprises.
3. Policy to deal with Sick units: This policy dealt mainly with restructuring or closing of the sick public sector units. For determining which units should be restructured and which one to close down, they were referred to the Board of Industrial and Financial Reconstruction (BIFR), and a National Renewal Fund (NRF) was created by the government to help retrain or deploy workforce that is retrenched from a sick unit and also to provide compensation to employees seeking voluntary retirement.
4. Memorandum of Understanding: This process helped grant more autonomy to the public sector units and also made them accountable for the results produced. The MoU was signed between the public sector unit and the related ministries. The public sector units were given clear defined targets and a fully operational autonomy to achieve that target.