Privatisation in India: Journey and Challenges

Cover
Half Title
Series Information
Title Page
Copyright Page
Dedication
Table of Contents
List of Tables
Abbreviations
Introduction
	Nationalisation and Growth of Public Sector Worldwide
	Difference Between Disinvestment and Privatisation
	India’s Recent Major Reforms Driven By Economic Necessity
	Slow Down of Economy in 2019
	Privatisation Push
	Covid-19 Pandemic
	New Public Sector Enterprises Policy for Atmanirbhar Bharat
	Post Covid Response
	The Book
	Structure of the Book
	References
1 The Economic Role of the State
	Expansion in State Owned Enterprises (SOEs)
	Nationalisation of Airlines, Banks, Insurance, Coal, Oil, and Sick Textile Mills in India
	Market Failures
		Natural Monopoly
		Public Goods
		Externalities
		Incomplete Markets
		Information Failures
		Unemployment
		Income Distribution
		Merit Goods
	Government (non-Market) Failures
		Internalities / Private Goals
		Distributional Inequities
	Revisiting Government Role in Economy
	References
2 Does Ownership Matter?
	Theoretical Arguments Favouring Public and Private Ownership
	Political Agency Problem in India
	Empirical Evidence About Ownership
	Measuring Impact of Privatisation
		Approach I: Comparing Government-Owned Firms to Privately-Owned Firms
		Approach II: Comparing Pre-And Post-Divestment Performance for Companies Privatised By Public Share Offerings
		Impact of Partial Privatisation On Firm Performance
	Distributional Impact of Privatisation
	References
3 The Public Sector in India
	Public Sector Enterprises in India
	India’s Industrial Policy
	Industrial Policy Resolution of 1956
	Statement On Industrial Policy, 1991
	Performance of Central Public Sector Enterprises (CPSEs)
	Other Contributions of CPSEs
	Shift in Policy Towards Public Sector Enterprises
	Mandatory for CPSEs to Plan Asset Sale, and Dividend From Year 2020
	New Public Sector Enterprises Policy for Atmanirbhar Bharat: 2021
	References
4 The Global Experience With Privatisation
	Privatisation in the 1980s
	Case of Privatisation of British Telecom
	Privatisation in the 1990s
	Case of Privatisation of ENI
	Treuhandstalt (THA)
	Privatisation in the 2000s
		Privatisation Trends From 2000 to 2008
	Privatisation Trends Since 2009
	Post-Covid Privatisation and State Ownership
	References
5 India’s Journey From Partial Divestiture to Privatisation: 1991–2021
	Triggers for Disinvestment
		Fiscal Distress
	IMF Conditionality – Driver of Indian Reforms?
	Politics of Privatisation
	Criteria for Selection of SOEs for Privatisation
	Comparative Advantage
	Net Economic Yield
	Influence of Political and Financial Factors
	Evolving Policy On Disinvestment
	The First Phase: 1991–92 to 1997–98
		Institutionalising the Disinvestment Process
		Disinvestment Commission
		Reconstituted Disinvestment Commission
		Disinvestment Receipts and Methodology Used
	The Second Phase: 1998–99 to 2003–04
		Moving From Partial Disinvestment to Privatisation
			Modern Foods India Ltd (MFIL)
		Disinvestment Proceeds From 1998–89 to 2003–04 and Methodologies Used
	The Third Phase: 2004–05 to 2013–14
		Disinvestment Proceeds From 2004–05 to 2013–14 and Methodologies Used
	The Fourth Phase: 2014–15 to 2020–21
		Modi’s First Term as Prime Minister
	Modi’s Second Term as Prime Minister
	Slowdown of Economy in 2019
	Privatisation Push
		Disinvestment Proceeds From 2014–15 to 2020–21 and Methodologies Used
	Disinvestment Policy, 2020
	Covid-19 Pandemic and New Policy Measures
	Note
	References
6 Big Ticket Privatisation and Asset Monetisation Proposed in Fiscal 2022
	Ambitious Plans for Privatisation in FY, 2021–22
	Workers Protest and Government Assurance
	Thrust of Union Budget, 2021–22: New Infrastructure
	National Infrastructure Pipeline (NIP)
	Three Pronged Strategy to Raise Resources for Infrastructure Financing
	National Monetisation Pipeline (NMP)
	Key Features of National Monetisation Pipeline
	Details of NMP9
	Sector Wise Details of Assets Over a Four-Year Period (FY 2022 to FY 2025)10
	Consolidated Pipeline
	Risks and Challenges in Asset Monetisation
	Plans to Sell PSUs Land
	Efficiency Scrutinies to Optimise Resources
	Specific Cases of Big Ticket Privatisations
	References
7 Privatisation of Air India
	Evolution of Air India and Indian Airlines
	Past Efforts to Restructure Airlines and Merger
		Vijay Kelkar Committee, 1997
		Disinvestment Commission
		NDA Government Effort (March 1998–May 2004)
		Merger of Air India and Indian Airlines in 2007
	Mounting Losses and Inefficiency
	Financials of Air India, FY 2015 to 2019
	Monetisation of Air India Assets Had Started From FY 2013
	Efforts for Strategic Disinvestment/privatisaion in 2017–18
	Renewed Efforts to Privatise Air India in 2020
	New Spanners in Air India Privatisation
	Tata Sons Win Air India Bid
	References
8 Privatisation of Bharat Petroleum Corporation Limited (BPCL)
	Evolution of BPCL
	Financials of BPCL
	Privatising BPCL: a Maharatna CPSE in the Oil Sector
	Strategic Disinvestment of BPCL
	Invitation for Expression of Interest (EOI)
	Response to Expression of Interest (EOI)
	References
9 Privatisation of Airports
	Introduction
	Airport Operations in India
	Airports Authority of India (AAI)
	Airports Economic Regulatory Authority (AERA) and Appellate Authority
	Privatisation of Airports in India
		Mumbai International Airport Ltd (MIAL)
		Delhi International Airport Ltd (DIAL), and Hyderabad International Airport
		Bangalore International Airport Ltd (BIAL)
	Government to Sell Its Residual Stake in Delhi, Mumbai, Bangalore, and Hyderabad Airports
	Analysis of Privatisation of Airports in 2019 and 2020
	Awarding All Six Airports to Adani Enterprise: Controversy
	Proposed Monetisation of Airports in 2021–22
	Impact of Covid Pandemic On Airport Privatisation
	References
10 Privatisation of Banks
	Why Banks Are Special Institutions
	Nationalisation of Banks in July 1969
	The Story Behind the Hurry to Bring Bank Nationalisation On 19 July 1969
	India’s Banking Sector and Agricultural Credit
	Privatisation of Banks – a Strategic Sector
	Should Large Corporate Houses Be Promoters of Banks?
	Reasons for Recommending Corporate Groups to Own Banks
	Note
	References
11 IPO of Life Insurance Company and Privatisation of a General Insurance Company
	Introduction
	Nationalisation of Insurance
		Life Insurance
		General Insurance
	The Global Insurance Industry and India
	FDI Increased in Insurance Sector
	Life Insurance Corporation (LIC)
	IPO of LIC
	Hurdles to Overcome Before the IPO
	Privatisation of General Insurance
	Note
	References
12 Telecom Sector – BSNL and MTNL
	Introduction
	Bharat Sanchar Nigam Limited (BSNL)
	Mahanagar Telephone Nigam Limited (MTNL)
	Efforts to Merge BSNL and MTNL
		Earlier Efforts
	Government Revival Plan of BSNL and MTNL, and Merger
	The Government Defers BSNL–MTNL Merger
	National Monetisation Pipeline: BSNL and MTNL
	Bharatnet Optical Fibre
	Telecom Towers
	Selling of Land Assets of BSNL and MTNL
	References
Appendix A
Appendix B Recommendations of Disinvestment Commissions: (Commission Report, Year)
Appendix C Methodologies Used for Disinvestment of CPSEs
Appendix D
Appendix E
	CPSEs ‘in-Principle’ Approved By Cabinet Committee On Economic Affairs for Strategic Disinvestment (Date of Approval in Bracket)
		ONGOING
	Transactions Completed
Index