Correct Answer - Option 3 : shedding of the ownership or management of
The correct answer is the shedding of the ownership or management.
Privatization:
It is defined as "The transfer of ownership, property or business from the government to the private sector is termed privatization. The government ceases to be the owner of the entity or business"
The process of privatization includes all the activities that increase the hold of private companies than the Government itself. The major impact of privatization is that the stocks of such companies are not traded over the stock market, which implies that the general public of the country does not have the right to supply the capital to such firms. The advantage of privatization is that privately-owned companies are that they are generally more efficient and bring objectivity to the company. All the ownership and management of the Government are shredded and passed on to the hands of a few private people. The features of privatization are:
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Ownership Measures: The ownership of all public enterprises ultimately shifts to private owners. The denationalization can be complete or partial.
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Organizational Measures: This is where we limit the control of the state in public companies. Some methods include holding company structuring, leasing. restructuring of the enterprises etc.
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Operational Measures: Public organizations and companies were running into huge losses. So the efficiency of these companies was to be increased.
Industrial Reforms in India, 1991:
There were some major reforms bought about in India in 1991, privatization was one of the major decisions taken by the Government of India. The Government had proposed the policy of privatization of some of the Government-owned industries in order to improve the slow growth of these industries. Two major decisions were taken with respect to privatization in India-
- The disinvestment of the government’s equity in public sector undertakings, and
- The opening up of hitherto closed areas to private participation.
