Geography Reference
In-Depth Information
TABLE 1 INVESTMENT IN CENTRAL PUBLIC SECTOR ENTERPRISES (CPEs)
Source:
Ministry of Disinvestment, Government of India, 'Annual Report 2000-2001'.
under-perform relative to the central units. While the central government has
had great difficulty building political coalitions in support of restructuring and
privatizing, some state governments seem to be making limited progress.
Privatization
Even now, despite rhetorical support for privatization, there remains disunity
within the government, and many bureaucrats continue to support the idea of
public enterprise. Two government bureaucracies that are involved in the public
sector and efforts at privatization are the Ministry of Disinvestment, formed in
December 1999, and the Department of Public Enterprises, housed in the
Ministry of Heavy Industries and Public Enterprises. Public statements from
these two nodal agencies reveal clearly that there is a wide range of opinion on
the utility of public enterprises and the effectiveness of privatization within the
state apparatus itself. While the former agency emphasizes the progress in
privatization, the latter organization calls attention to the improved performance
that has resulted from enterprise restructuring and operational reforms.
Those who deem public sector reform and disinvestment to be critical for
India's economic health argue that these methods constitute the best hope for
reducing the fiscal deficits of the center and states, which combined stand at
approximately 10 per cent of GDP. For example, the International Monetary
Fund has suggested that it is largely the fiscal deficit that bars the way of India
achieving 8 per cent to 9 per cent GDP growth rates.
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