Privatization

Privatization

Privatization refers to the transfer of ownership and management of the public sector enterprises from the government to the private sector. The government ceases to be the owner of the entity or business. Privatization is expected to bring in more efficiency since private enterprises are driven by the idea of profit and resource maximisation. The government has adopted strategic disinvestment, sale of minority shares, and disposing off loss making units to the private sector as major privatisation routes. In strategic disinvestment, significant proportion of a PSU's shareholding and management control is transferred to a private sector player.