PRIVATISATION HAS TO BE PRAGMATIC, OTHER WISE CAN BURN FINGERS

 

PRIVATISATION HAS TO BE PRAGMATIC,
 OTHER WISE CAN BURN FINGERS

All the Nations in the World have passed through or passing through the following tags depending on the health conditions of their economy and the situations of their State (Nation) as well as people:

       I.       Poor and Underdeveloped Nations
     II.      Developing Nations
  III.       Developing and Emerging Nations ( Emerging out of Developing tag )
  IV.        Developed Nations 

The Nations that have the tags of the Developed Nations today, have crossed through the previous 3-tags in its respective order ( from poor/underdeveloped to Developing and Emerging ) in the past and over the time.

Similarly, the Nations have been run with the following composition of Sectors in their Economy and State from time to time:

i)              Public Sector ( Entire/Maximum Ownership of Government )

ii)            Private Sector ( Entire/Maximum Ownership of Private Enterprises)

iii)    Mixed Sector ( a mix of Ownership of Government and Private Enterprises )

Further, the Nations had had shares in their economy by the Public/Private/Mixed Sectors as follows progressing over time:

     A).  Public Sector Dominated :

Maximum Public Sector, Minimum Private Sector and Some Mixed Sector.

B).  Private Sector Dominated :

Maximum Private Sector, Minimum Public Sector and Some Mixed Sector.

C).  Sector Balanced :

Balanced shares of Public Sector, Private Sector and Mixed Sectors.

It has been observed  historically and empirically that, when the Nations are Poor and Underdeveloped, they are generally Public Sector Dominated. Because the Private Sector would not find interest and profit to get into running the economy and the Nation. Therefore, the Government ( or the State in other words ) remains in the maximum business of running the economy and the Nation as a whole.

When the Nations move towards the Developing or Emerging Stage, the economies try to become Sector Balanced. Because the State or the Public Sector and Private Sector both try to take stake in running the economy and the Nation.  

And, when the Nations come to acquire the tags of the Developed Nations, they have tried to become Private Sector Dominated, because, the State or the Government would try to get into less of the matters of running the economy and running the affairs of the Nation.

An example of Exception in the above postulations was the erstwhile Soviet Union or USSR ( Union of Soviet Socialistic Republics ) and in that case, even if it was a Combined Union of Developed Nations of its time, it was a Public Sector Dominated State, due to its inherent ideology of operation based on the principles of Communism. However, the Soviet Union had to fall apart, as the system could not sustain and it became unmanageable.

The other example is the USA ( United States of America ), being an extremely developed Nation with a Federated Structure of its States (provincial states ), has run itself smoothly as a Private Sector Dominated Nation. In case of USA, it can not be said, it became a Private Sector Dominated Nation over night; in fact they have moved over about 200years or so from being Public Sector Dominated to Private Sector Dominated.

The European Nations or for that matter Japan or Australia or any other Nation(s) who have qualified to be called as Developed Nations, they have mostly moved from Public Sector Dominated to Sector Balanced  and then  Private Sector Dominated in that order. Still some of the developed Nations remain Sector Balanced as well. 

The Nations that are designated as Poor/Underdeveloped and Developing in the world today, may be in the African Region, Asian/Asia Pacific Regions are without choice; are still remaining as Public Sector Dominated.

In the contemporary times, China being run as a Communists run Country and being designated as an Emerging Country ( or Emerging Market ), very closed to being called as a Developed Country, is not a Public Sector Dominated Economy ( as was the Soviet Union working under communist back bone ), neither it is a Private Sector Dominated Economy to be called so. China, still can be called as a Sector Balanced Economy or a Sector Balanced State (Nation).

Now coming to India's case, which is today, designated as a Developing and Emerging Nation ( Emerging out of the Developing Stage ), can be safely said to be a Sector Balanced Economy and State (Nation). Post independence of India in 1947, India was an extensively exploited, ravaged and bruised State out of close to more than 300 years Colonial British Rule ( who used India as a resource to tap and not as a State and destination to nurture and develop ), and very badly bruised by an engineered Partition of the Pre-independent India to make it two Nations called as India ( India of the present date ) and Pakistan. Therefore, after the independence on 15th August 1947, India had a very small private sector having spine to stand up strong at its strength, the Independent Nation of India had to rebuild and consolidate in creating a Robust Public Sector dominated system and structure at that time,  to sustain and develop over the time.

Therefore, without choice, India became a Public Sector Dominated Economy and State, after its independence in 1947. It was required, it was the right approach to take and it was the just and pragmatic step to march on at that point of time. The "License Raj", though it is named and blamed a lot in the contemporary deliberations without sympathy, however it had emerged out of the compulsion India had after its independence in 1947, to be run as a Public Sector Dominated State without any choice then, and it needs to be considered in the time perspective and need of its time.  

India, having traveled for about 44-45years onwards from 1947 independence from the British, as a Public Sector Dominated Economy and State, it had to compulsively (also) get into massive reform programme starting from 1991-92 without choice, as, with the changing world order and India’s internal mechanism and population, it became unstainable. Therefore, precisely from 1991-92 onwards, India has started the move from Public Sector Dominated towards Sector Balanced Sate. Hardly 30 years have gone from 1991 when considered up to 2021. India cannot be converted to a Private Sector Dominated Economy from a Public Sector Dominated Economy in 30years at a stroke, it is a smaller a time frame and gestation for such an audacious fast march. USA has taken more than 200years to be Private Sector Dominated from Public Sector Dominated. India has to fast achieve the status of a Sector Balanced State and Sector Balanced Economy before it can be converted to be a Private Sector Dominated Economy or a Private Sector Dominated State.

Here is the catch and pragmatism to be considered. Is India a Sector Balanced State and Economy right now or it will take some more time or efforts ? In my opinion, India needs to continue as a Sector Balanced Economy for some more time, may be 20-30years more to come. Sector Balancing Process does not mean the Public Sector has to be closed, dismantled and sold off. Sector Balancing would mean, the private sector expands over time, while the Public Sector Continues to stay and perform efficiently. It does not mean to make the Public Sector uncared for, inefficient and non-performing to finally sell off and get rid of it. India still has a huge population, more than 50% of 1300 million ( or 130 Crores ) population which can not afford everything converted to Private Sector. Private Sector needs a profit, and a profit it likes to have from the business. The products/offerings ( goods and services ) of the private sector therefore, will have a price to be paid which, just more than 50% of Indian population can not afford to pay if everything is made a baby to be managed by the private sector, to ease off some of the head ache of the State or Government managers.

Therefore, while thinking of Privatization in India, it should be very pragmatic approach where to put the finger of the Privatization. As said above, moving towards Sector Balanced State or Economy, does not mean making the Public Sector uncared for, inefficient, non-performing and then making it deserving to be sent to slaughter house or in other words, to be sold off. Moving towards Sector Balanced State is expanding private sector that is reasonable and caring for the hapless population and retaining the Public Sector in well cared for and efficient conditions. After being Sector Balanced State, then it can be thought of to be Private Sector Dominated state like USA; that time has not come and as I said it may be 20 to 30 or to even 50years hence forth. I am not saying if USA took more than 200years when the Civilization had not progressed so much to become Private Sector Dominated State and Economy; India should also take 200years to reach such standards, however, there has to be a hatching time, although may be shorter than it as the Civilization has also progressed to allow faster turn arounds. Given the India’s pedigree, demography, culture and diversity along with the attitude and orientation of its whole population, it may suit for India, to still remain a Sector Balanced Economy and State, and not even go for a Private Sector Dominated State and Economy for a very long time to come. It has to be observed, assessed and pragmatically decided, by giving due consideration to the internal strength, bottlenecks and weakness of India as a Nation, its human population consideration and consideration of its resources both material and non-material.

Therefore, the thoughts and actions for Privatization in India have to be based on Pragmatism giving due consideration to the Internal situation of India and not under undue pressure of the World Bodies or Other Influential Nations or to show to the world that we are doing Privatization in India as a means of reform even if it amounts to hurting our own home and divesting our inherent and internal strength.

As explained, Pragmatism is important while harbouring the thoughts of Privatization and taking privatization into plans, while I cited some examples to demonstrate; it is a matter of paramount examination while taking decisions of privatization in all kinds of Nations in the World. Otherwise, it has the potential to burn the fingers put in Privatization.

About the Author : Dr. Nimain Charan  Biswal is a B.Sc.(Agri. Science and Technology). M.B.A. and Ph.D.( Management Area ) by qualifications and he has 35 years of work experience in both  industrial and development sectors in diversified fields of social importance. He has been educated at Orissa University of Agriculture and Technology (OUAT)-Bhubaneswar, Institute of Rural Management Anand (IRMA) and Gujarat University (with Resource Support of IIM-Ahmedabad). Dr.Biswal is further educated at IIM-Calcutta, XLRI-Jamshedpur, Apple Computer Industries and Spar Inc., USA. He has worked for reputed National and International Organisations in Senior/Top Management Capacities. He is a management  expert covering extensive areas from management in agriculture, industrial management, development management to management of public systems. He is a prominent professional of India and known Internationally as well. He lives at Mumbai in India.





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