PRIVATIZATION IN INDIA
Given the expanding size of the public sector and the rationale guiding the industrial policy formulations in India, a brief historical perspective is necessary in understanding its privatization model. The public sector was sought to occupy the ‘commanding heights’. This was clearly articulated in the industrial policy statements of 1948 and 1956. By 1991, there were 246 central public undertakings (CPUs) with an investment of over Rs 1tn equivalent of over 10 per cent of GDP. The CPUs are engaged primarily in the core sector, in particular infrastructure and the services, for example, steel, minerals and metals; energy, petroleum; chemicals including drugs, pharmaceuticals and fertilizers; heavy engineering; transportation equipment including railway locomotives, aircraft; international trade and marketing; transport and communication, construction, industrial consultancy, financial services, and tourism. Curiously, the CPUs encompass consumer products as well, such as bread and electric lamps, an area not intended for it.