Belling the cat

An informative exploration of how privatisation unfolded in India

- Amitabha Bhattacharya

The evolution of our industrial policy covering the heady days of public sector enterprises and the high noon of privatisation witnessed many watershed moments. Unfortunately, much of the discourse, including the academic ones, has been partisan, coloured by ideological preferences. Consequently, debates have largely been informed by a clash of binaries—socialist vs capitalist, efficacy of public sector enterprises vis-à-vis that of private ones. Rhetoric has often submerged dispassionate analysis of facts.

The book under review is important since it seeks to steer clear of such inane magoguery. The author who taught economics and commerce at Delhi University “outlines the successes, missed opportunities and key policy shifts simply and without the hyperbole that often accompanies any discussion of state-run institutions.” She has analysed, chronologically and prime minister-wise, the significant milestones of this journey, from Nehru’s time through Vajpayee’s tenure to the present day, identifying the key policy elements formulated during those phases. Based on lessons learnt, she suggests the way forward. Equally important, but perhaps less discussed in the public domain, is her assessment of the impact of privatisation on the financial performance of the divested companies based on research studies.

As the author shows, the inherent inefficiencies of the public sector, such low productivity and high-cost structure “started surfacing towards the closing years of the Nehru era”. One can understand the demands of that time and Nehru’s ideological preference for socialism and antipathy towards the capitalist class.