Over the past decade India has been undertaking a programme of economic reform, and at the same time the economy has been growing at a high rate. As part of the reform programme, and in line with prevailing economic thinking, India has been privatising its large, ungainly public sector. One assumption underlying this programme is the dogma that public sector enterprises are doomed to inefficiency, and that competitive market forces can be relied on to make firms more efficient once they are privatised. But is this really true?
Combining rigorous data analysis with case studies to provide a balanced evaluation of the process of deregulation and privatisation within the overall context of economic reforms, the author demonstrates, remarkably, that, contrary to the prevailing view, private sector firms do not outperform public sector firms across all sectors. He also shows that revenue-raising considerations have weighed more heavily with the government than efficiency objectives. Overall, this study of the reform process in India, with its unique longstanding mix of private and public sectors, will be of great interest to all those studying reform and transition worldwide.
Table of Contents
List of Figures List of Tables List of Appendices Preface Acknowledgements List of Abbreviations 1. Introduction 2. Privatisation: Theory and Evidence 3. Comparison of Performance in Industry and Study of Impact of Privatisation, Using Financial Measures 4. Comparison of Performance in Industry, Using Input-Output Quantities 5. Performance of Public and Private Sector Banks in India and the Impact of Privatisation 6. Method of Sale: Is Strategic Sale the Best Option? 7. Governance and Privatisation 8. China's Privatisation: A Synoptic View 9. Summary and Implications for Privatisation Policy References
T. T. Ram Mohan is Associate Professor at the Indian Institute of Management, Ahmedabad. Prior to entering academics, Professor Ram Mohan had a varied career in consulting, banking and investment banking. He has also been New York Corrrespondent for The Economic Times, India's leading financial daily, for which he now writes a fortnightly column.
'Is the private sector indeed more efficient than the public sector? Has disinvestment - the limited privatisation undertaken so far - been followed by any improvement in performance? For convincing answers of such long debated questions one has to read this book by T.T.Ram Mohan, known for challenging the current economic orthodoxy.' - Economic and Political Weekly