ABSTRACT
This chapter elucidates the concept, indicate the circumstances in which changes in comparative advantage can occur and mention the problems encountered in identifying the changes and in introducing policy responses. The concept of comparative advantage of a public enterprise is a useful guide to decision, though computing it is not easy. The evaluation of changes in comparative advantage has to be entrusted to a machinery that can work independently of any pressures of brief for the government. It is possible to introduce as a helpful way out the policy of converting a public enterprise that has lost its comparative advantage into a joint venture with some private holding. Reference may be made to an interesting aspect of the process of perceiving a loss in comparative advantage on the part of a public enterprise. A growing mixed economy is generally likely to witness an improvement of market forces and corresponding additions to the comparative advantage of private enterprises.
