ABSTRACT
The term privatisation essentially denotes marketisation or bringing the enterprise under the disciplines of the market. There can be three options of policy: ownership changes, organisational changes, and operational changes. This chapter commences with an analysis of the reasons for privatisation. It focuses on the substantive implications of privatisation, especially the distributional, regulatory, and exchequer concerns. The concept of privatisation highlights the precise nature of what is privatised: namely, privatisation of ownership, privatisation of management and privatisation of enterprise disciplines. The chapter analyses the distributional implications of divestiture. It examines how privatisation directly benefits the exchequer. Divestiture in the case of a profit-making enterprise has the obvious effect of loss of income to the exchequer or the public sector. A privatised monopoly calls for controls over prices in the interest of the consumers and, additionally, over profits in the interest of distributional equity.
