The issue with privatisation really is whether the government is the best entity to do business; or as some would say is an IAS officer a better CEO than an entrepreneur or an MBA?

Public Sector Units may have been appropriate in the Nehruvian world, but they have resulted in India being extremely uncompetitive internationally; many are profitable today only because they are shielded from competition. Many are loss making even after being shielded from competition. Indian consumers were fed with a narrow range of shoddy goods at uncompetitive prices. Worse, these products could never hope to compete internationally. There may have been a few exceptions but this generally was the case.

Many of these were heavily subsidised by the government. This meant taxpayers were being made to pay for the inefficiencies of the PSU.

Experience around the world has shown this is not a model that works today. Government is best when it governs, not when it does business.

As I pointed out in my blog, PSU sell-offs should be across the board; whether loss-making or not. Why should investors pick up only loss making businesses. Once sold, the government must remove protectionist walls to ensure free play of competitive market forces.

The human element is one of putting in place healthcare & education systems that takes care of these basic needs. This is the ‘human face’ of reform that is needed.