Articles by Pradip Baijal

Privatisation is an evocative subject even in the developed economies. In a developing economy like India, with its tradition of successful and pervasive public intervention, it generates unique mind-blocks. Its implementation therefore requires persistent, persuasive zeal. However, the compulsions of ensuring higher levels of investment at progressively higher levels of efficiency and productivity require a complete restructuring of the economic environment. Low levels of public savings, inadequate competition and low export orientation are barriers which need to be transcended. Privatisation and liberalisation of the licensing regime for Foreign Direct Investment are two initiatives which can meet the objectives of efficiency enhancement, domestic and foreign resource mobilisation and incremental capital outlays. The pace of privatisation has quickened since 2000. The adoption of a strategy of block sale of government stock in identified PSEs to a strategic partner, along with transfer of management control, as opposed to market sale of shares in small lots, has enhanced the value received by the government through disinvestment. It also ensures that these assets are put to productive use in the most optimum time frame and with the maximum benefit. While it is too early to quantify such benefits, there is sufficient anecdotal evidence of significant welfare gains for employees, institutional investors and the economy, along with the quantifiable gains for government, from the additional resources freed by the sale of PSEs.

Nationalisation or privatisation is a policy response of the government to manage contemporary ideological, economic, industrial or political pressures on the country's economy. The pressures leading to nationalisations in Italy are different from those in the rest of west Europe and similar to the developing countries. The same applies to privatisations. This paper examines the experience of nationalisation and privatisation in Italy to draw lessons for developing countries.

Budgetary problems and economic pressures generated by international competition forced the British government in the 1980s, as they did the Japanese government in the 1880s, to opt for privatisation of industries. However, the privatisation programme that Tokyo launched during the 1980s has been different from the British programme in terms of the pressures encountered and the overall approach.