Privatisation means allowing the private sector to set up industries that were previously reserved for the public sector. Privatisation is the process of transferring ownership of Pubilc Sector Units (PSUs) to the private sector.
Measures were taken for Privatisation:
- Dereservation Policy: The number of industries reserved for the public sector has been gradually reduced to only two and all other industries are deserved i.e. opened up for the private sector.
- Establishment of BIFR: Board of Industrial and Financial Reconstruction (BIFR) has been set up to make the decisions about sick public sector units i.e. whether to close or revive them.
- Creation of NRB: National Revival Board (NRB) has been set up to take care of unemployed workers of the sick units.
- Status of Navratna: On the basis of strategic importance, nine public sector enterprises were selected and given the status of ‘Navratnas’ i.e. they were given the full managerial and financial freedom to make them global giants. Some are ONGC, BHEL, HPCL, SAIL, etc.
- Disinvestment: This was an important step undertaken to reform public sector. The Government started selling PSUs to the private sector, those are running at a loss. e.g. Maruti Udyog Ltd. VSNL, etc.
