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Thursday, Sep 23, 2021
Outlook.com

Gamekeeper As Poacher

A blind Thatcherite strategy for privatisation will never work for India

Gamekeeper As Poacher
Gamekeeper As Poacher
outlookindia.com
-0001-11-30T00:00:00+05:53

A government without a coherent economic vision. Open season for lobbyists and special interest groups. D.R. Mehta, chairman of SEBI, has already fired his first salvo. He wants the new government to adopt a "Thatcherite" model of privatisation—selling big stakes in state-owned companies to small investors. This, according to him, would revive India's moribund equity market and make the public sector "really and truly owned by the public". Given the current state of bankruptcy in economic policy thinking, people in power may well believe Mr Mehta. That would be unfortunate, even dangerous. Here's why.

Mr Mehta is wrong about British privatisation, which was not about equity sales to small investors. Some of the more successful privatisations involved no sales of shares at all. A good example of this is the privatisation of the Royal Naval Dockyards. These were leased out to private consortia who operated them according to private sector principles for a fixed time period, after which the lease was scrutinised by...

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