PRIVATIZATION IN INDIA : ISSUES AND EVIDENCE
(A doctoral dissertation proposal)
The proposed research is intended to survey the process of privatization in India and assess its impact on the Indian economy. The central issue we will address is the impact of privatization that has taken place so far on profitability and performance of PSUs. Going beyond this, we will attempt to understand what explains the impact of privatization on performance. Is it the use of market power by oligopolistic firms whose pricing power had been constrained under government ownership ? Is performance bought at the expense of labour through extensive layoffs so that what we see is essentially a transfer from workers to shareholders ? Or are we confusing the impact of privatization with the more generalised impact of deregulation in the economy, which in itself could spur efficiency ?
The research output will comprise the following:
1. A survey of the literature on privatization, particularly with respect to less developed countries.
2. A review of the role of the public sector in the Indian economy, and the process of economic liberalization and privatization in India upto this point.
3. Impact of privatization on firm performance.
4. Explanation for the impact of privatization
5. Assessment of mechanisms of corporate governance in India.