Mnc in India Essay

To help in rapid growth and industrialization and create undeniable infrastructure for economic discipline. 2. Promote redistribution of income & wealth 3. Create employment opportunities 4. Promote regional balance development 5. Promote import substitution save and earn foreign exchange for country. 6. Basic Infrastructure (STC, Railways, SAIL) governing of Public Sector Ministry ( Railway, Finance etc) Departmental Undertaking (Defense, Post & Telegraph, Defense production unit) Statutory Corporation( LIC, port India, IFC,RBI,ONGC, etc.. Central Board (Bhakra Nangal, Hira Kund ,Nagarjun Sagar dam) Government Companies ( Ashok Hotels, ITI, HMT Hindustan shipyard etc) Pricing Practice ?Administrative Price Price fixed by Government ?No profit No loss Price ( DVC, Hindustan antibiotics, Hindustan Insecticides) ? Cost Plus Price ITI, HAL, Bharat electronic ? Competitive Price ?Follow the leader ?Subsidized Prices ?Discriminatory Prices Private Sector ? Privatization Transfer of will power and control of an existing public sphere enterprise ? Privatization whitethorn be full or partial.It may be selective i. e.. Some function are transformed to the private sector, which other are carry in public sector. ?Increase in competition . The Privatization movement The move towards privatization has gained momentum since 70s. The following are usually mentioned reasons 1 The emergence of conservative governing in principal industrial countries 2 The emergence of multinational entities 3 Technological changes The Privatization movement contd. 4 Emergence of local crownwork commercialise and entrepreneurship 5 Dissatisfaction with performance of public sectorReason for Indian Privatization 1. Crippling Budget deficit 2. undischarged growth by economies of Korea, Taiwan, Malaysia in private sector 3. Galloping live of government intervention in business and industry & procedural difficulty 4. Collapse of USSR& communist government in eastern Europe 5. Changes in China 6. Emergence of professional management 7. IMF & World Bank extended arm to swellism 8. gulf crisis 9. Lack of demand in economy 10. Integration of world trade 11. Developed local capital market and Financing Institution Recent Reasons To Strengthen Competition To improve public finance To blood Infrastructure Growth Accountability of share holders To reduce unnecessary interference More disciplined crusade force The main reason for increased efficiency gain as a result of privatization are attributed to (i)Less governmental interference in decision reservation (i)Staff remuneration is more closely linked to productiveness and profitability (ii)Firm are exposed to financial market discipline as opposed to government clog up (iii)Firms cost reducing effort are higher under competitive private self-command Advantages of public sector organizations Govt . Control in sensitive areas ? More employment ? Effective decision making ? Public accountability ? Access to all ? More employee satisfaction-better life work balance ? Recognition and recognise ? Job security Disadvantages of public sector organizations ?Inefficiency results due to the size of the organization ?lack of incentive for employees ? losses must be met by the taxpayer ? Political interference ? Less customer satisfaction ? High cost of delay/red tapism Disadvantages of public sector organizations contd. ?Headless plants ?Lack Demand supply relation ? everywhere/Under capacity ?Fear of ScamsAdvantages of private sector organizations ?Quick decision making ?No political interference ?More customer satisfaction ?Easy access to capital market Disadvantages of private sector organizations ?Chances of mismanagement ?Inefficient decision making ?Less focus on poor people shipway of Privatization ? Disinvestment ? Contracting ? Franchising ? Permitting private sector enter into PSU reserved area ? Liquidation ? Leasing Disinvestment Long Term system on disinvestment 1. Strengthen profita ble PSU to promote greater competitiveness to enable payment of higher dividends to the government to enhance Value 2.Financial restructure and revive loss making PSU to invite private capital for long term turnaround. 3. Enhance government receipt by disinvestment in profitable PSUs Initially 40 out of the 245 PSUs were referred to the disinvestment committee Conclusion ? Public sector enterprises ? Private sector enterprises ? Privatization ? Need of privatization ? Obstacles of privatization ? Ways of privatization- Disinvestment ? Advantages and disadvantages thank to.. Prof. Suneel Gupta Associate Professor, Ghs-IMR, Kanpur Prof. Mansur Ali Khan NSB Prof. Surjyabrat Buragohain NSB Thank you all ?SIVAPRASAD P V ? PREMKUMAR ? VIGNESH ? MANOJ