Privatisation

Privatisation means the transfer of ownership and/or management of an enterprise from the public sector to the private sector. It refers to the introduction of private control and ownership in public sector undertakings. According to the World Bank, “privatisation is the transfer of State owned enterprises to the private sector by sale (full or partial) of assets following their liquidation.” In the words of Barbara Lee and John Nellis “Privatisation is the general process of involving the private sector in the ownership or operation of a State owned enterprise.”

There are several forms or methods of privatisation such as :

• Denationalisation of a public enterprise by its complete sale to the private sector. For example, BAL co. was sold to Sterlite Industries.
• Divestiture, i.e., the sale of equity in full or part of a public sector undertaking to private sector.
• Transfer of management of a public sector enterprise to private sector through a management contract.
• Joint venture, i.e., joint ownership of an enterprise by government and private sector.
• Leasing, i.e., transferring the use of assets of a public sector unit to private bidders for a specified period.
• Franchising of public sector services to designated private sector units.

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