Topic: Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth.
5. Privatisation of Public Sector Enterprises (PSE) is not always the panacea and must always be done strategically, while the proceeds from it must be utilised in an objective manner to create further assets. Comment. (250 words)
Difficulty level: Moderate
Reference: The Hindu
Why the question:
India’s fiscal deficit (for the Centre) in FY22 is expected to be 6.8% of the GDP, or in layman’s terms about ₹15.06 lakh crore. When considering the debts of States as well, this jumps to about 12.7% of the GDP (as of FY21). In comparison, the budgetary outlay for MGNREGA in FY22 was ₹73,000 crore, while the Ministry of Defence was allocated ₹4.78 lakh crore for FY22. Every year, the shortfall grows wider.
Key Demand of the question:
To write about strategic privatisation of PSE’s and objective utilisation of their funds.
Directive word:
Comment– here we must express our knowledge and understanding of the issue and form an overall opinion thereupon.
Structure of the answer:
Introduction:
Start the answer by defining privatisation and give recent examples of privatisation.
Body:
In the first part, write about the reasons due to which the government undertakes privatisation.
Next, write about the need to privatise strategically and factors that must be considered before going ahead for privatisation.
Next, talk about the objective utilisation of the proceeds from privatisation to be invested in creation of more assets rather than engaging in populist measures.
Conclusion:
Conclude with a way forward.
