Privatization

First things first. Government should be in the business of governance alone and not divert their attention on the management of PSU's. Agreed that there are certain strategic sectors where government control is necessary, but even there privatisation in a limited fashion would actually improve efficiency across board. I agree that government should not concentrate only on the profit making firms. Loss making PSU's can also be privatised and also prove profitable on the long run. The thing with many of these so called loss making PSU's in india is that they are so used to subsidies that the thing called market economics or dynamics don't work for them. These subsidies over a number of years (both in the input as well as output) were typically spent and not invested, and have no relevance to the firm's current worth. Agreed that private sector would jump in to bid for the profitable PSU’s over the loss making one’s. But the govt should realize that if it is not finding any takers for the loss making PSU’s then there is no logic of running it themselves. If there is an inherent value in the PSU even though it is loss making, any prudent investor would jump in to buy these companies. Here are some of the points in favour of privatization of profitable public enterprises.
a) As I said before a Govt should be in the business of Governance alone
b) By selling the profitable PSU’s the government can improve the fiscal scenario
c) There would be efficiency gains which can be seen in the companies which have been privatized.
d) Spillover effect: If a Public sector enterprise is privatized then the first thing which would happen is increase in the monetary flow in the economy itself. It would also help all the ancillary companies associated with the PSU. Another important point is that the govt should relinquish control entirely after the sale of these PSU's. Total privatization is preferable to partial ones.