Government policy in India as in other countries is undergoing a sea change both on account of shifts on ideological account as well as basic economic considerations.
Moreover, international lending agencies have increasingly brought in the privatisation of public enterprises as a condition for their project lending in several countries.
It is evident from the World Bank report which has supported privatisation of public sector steel industry and World Bank experts have suggested that privatisation is essential to attain productivity and efficiency.
After four decades of experiments with nationalisation in many countries of the world, a new world-wide experiment has started during the eighties in the form of privatisation.
Many countries are moving away from nationalisation out of sheer economic compulsions, viz., the widespread failure of the public sector enterprises, higher pressure on government budgets, particularly due to the subsiding of the public sector white elephants and various other macro-economic problems.
The public sector has lost its dynamism and according to some, it is now more a drag on development than an engine of growth.
It can be said that if a failing private enterprise should go out of business or close down the organisation, the same principle should be followed in case of public sector. But this is not always the case as the sick PSUs are allowed to operate with budgetary support.
Contradictory as it may seem, privatisation is perfectly compatible with Marx’s postulate of withering of the State. It really envisages the shifting of ownership of the means of production from the elite to the masses.