Forms of Privatization (a) Contraction(minimisation) of public sectors: The number of industries reserved for public sector was reduced from (as per policy) to only industries viz, Arms and Ammunition, Atomic Energy, Coal and Lignite, Mineral oils, Mining of ores, Mining of copper, lead, zinc etc., Minerals for atomic energyand Railways. Currently only Atomic Energy, Defence and Railways are Government monopoly industries i.e., Public sector industries in the country. (b) Sales of shares of public sectors to the private sector: Indian Govt. started selling shares of PSUs to public and financial institution.
Now the private sector will acquire ownership of these PSU’s. The share of private sector has increased from % to % in the year and after. (c) Memorandum of Understanding: MoU system was introduced in 1991to raise the productivity and performances of PSUs. It strengthens the relationship between PSUs and administrative departments.
The main work 12th Commerce Unit - - . . PM of MoU is to judge the PSUs and level their performance. (d) Disinvestment in PSUs: The Govt.
has started the process of disinvestment in those PSUs which had been running into loss. It means that Govt. has been selling out these industries to private sector. So disinvestment is a system of privatizing government enterprises.