What is Privatization? meaning and definition

Meaning: The new set of economic reforms aimed at giving a greater role to the private sector in the nation-building process and a reduced role to the public sector.

Definition: Privatization, also spelled privatisation, can mean different things including moving something from the public sector into the private sector. It is also sometimes used as a synonym for deregulation when a heavily regulated private company or industry becomes less regulated.

To achieve this, the government redefined the role of the public sector in the New Industrial Policy of 1991.

• The purpose of the sale, according to the government, was mainly to improve financial discipline and facilitate modernization.
• It was also observed that private capital and managerial capabilities could be effectively utilized to improve the performance of the PSUs.
• The government has also made attempts to improve the efficiency of PSUs by giving them autonomy in taking managerial decisions.