PRIVATISATION

The decades of the 1980s and 1990s witnessed a ‘rolling back’ of the state by the governments, especially in the USA and UK under the inspiration of the New Right priorities and beliefs.18 The policies through which the ‘roll back’ of the state was done included deregulation, privatisation and introduction of market reforms in public services. Privatisation at that time was used as a process under which the state assets were transferred to the private sector.19 The root of the term privatisation goes to this period which got more and more currency around the world once the East European nations and later the developing democratic nations went for it. But during the period several connotations and meanings of the term ‘privatisation’ have developed. We may see them as follows:‌

(i) Privatisation in its purest sense and lexically means de- nationalisation,20 i.e., transfer of the state ownership of the assets to the private sector to the tune of 100 per cent. Such bold moves took place

only once anywhere in the world without any political fallouts—in the early 1980s of the UK under the Thatcher regime. This route of privatisation has been avoided by almost all democratic systems. In the mid-1990s some West European nations—Italy, Spain and France— besides the USA went for such moves.21 India never ventured into any such privatisation move.

(ii) The sense in which privatisation has been used is the process of disinvestment all over the world. This process includes selling of the shares of the state-owned enterprises to the private sector. Disinvestment is de-nationalisation of less than 100 per cent ownership transfer from the state to the private sector. If an asset has been sold out by the government to the tune of only 49 per cent the ownership remains with the state though it is considered privatisation. If the sale of shares of the state-owned assets has been to the tune of 51 per cent, the ownership is really transferred to the private sector even then it is termed as privatisation.

(iii) The third and the last sense in which the term privatisation has been used around the world, is very wide. Basically, all the economic policies which directly or indirectly seem to promote the expansion of the private sector or the market (economy) have been termed by experts and the governments as the process of privatisation. We may cite few examples from India—de-licencing and de-reservation of the industries, even cuts in the subsidies, permission to foreign investment, etc.22

Here we may connect liberalisation to privatisation in India. Liberalisation shows the direction of economic reforms in India, i.e., inclination towards the dominance of market. But how will it be achieved? Basically, privatisation will be the path to reform. It means, everything which includes promotion of the ‘market’ will be the path of the reform process in India.