VICE Chairman of the think-tank, NITI Ayog Mr. Rajiv Kumar has made the Government’s desire clear when he said that the Government had no intention to be “the main driver of growth in the country”. This role, instead, will be taken up by the private sector, thus assigning it a major part in the nation’s future growth. While assigning such a pivotal place to the private sector in the future growth of the economy, the Government has also shown willingness to bring down its stake well below 50 pc. There are economists who have been advocating greater role for the private sector in the country’s economic progress and have been saying that ‘Government has no business to be in business.’ The country’s economic interests would be much better served if the initiative is passed on to the private sector. The NITI Ayog Vice Chairman appears to have reciprocated this sentiment and has acknowledged the need to make radical shift in the role of various sectors in the nation’s economic development.

 

And this does not seem to be a mere assurance. With the plans already on the drawing board to divest larger stake in several of the undertakings in public sector and having drawn up a precise scheme of things, the Government appears to be walking the talk. The process of course was launched during the previous tenure of the National Democratic Alliance (NDA) Government. Though response to divestment plan was not as encouraging as the Government’s expectations, as was witnessed in the case of the heavily debt-laden Air India, the Government now appears confident of achieving its disinvestment goals.

 

During her budget speech, Finance Minister Ms. Nirmala Sitharaman had spelt out an ambitious road map for divestment, in both profit earning and non-profit making public sector units. The Government is confident that with major policy changes that were introduced during previous term, coupled with new initiatives, there would be encouraging response from the private sector. The Government’s expectation is that by opening up lucrative business and manufacturing areas to private sector, which hitherto were entirely in Government domain, the private sector would be encouraged to enter some of the critical areas of manufacturing.

 

The case in point is that of the Railways. During the budget speech, the Finance Minister had spelt out Government’s desire to engage with the private sector in some of the prestigious Railway projects through the public-private-participation (PPP) model. This model has proved successful in the highway and other infrastructure segments in the past. The Government wants to extend that model to infrastructure development and manufacturing, especially in Defence sector.

 

The good thing about this approach is that the private sector has shown interest in taking up Government’s encouraging offers and is seen to be active in undertaking joint venture projects in cooperation with Government entities. The private sector’s involvement in areas like Defence and even space technology and research in recent years appears to be the harbinger of the change that India wants to be. There are very promising areas like textiles, leather, agriculture, mining, mobility, exports etc. where the Government is willing to assign greater role to the private sector to realise the true potential of the Indian economy.

 

All the efforts of the Government are aimed at reviving investment in the private sector, nearly dried up over the last few years while the Government alone has been pumping in money to keep the growth engine moving. But the Indian economy’s potential would be realised only when there is revival in private sector investment. Government’s offer to withdraw from some of the areas is an invitation to private investment.