What measures have been taken to give more priority to private sector in the developmental process of the Indian economy?

Question

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Solution

The private sector was encouraged to participate in operation and ownership of production units by way of:

Reduction in number of reserved public sector units.
Disinvestment in public sector undertakings by selling the shares of Public Sector Undertakings (PSU) into private hands.
Increase in the share of private sector in total investment.
Corporatisation of a public department with some operational and managerial autonomy.
Licensing policy, which was a disincentive for the private sector to start new units or expand existing units, was abolished for all industries except four.
Tax reforms, free flow of capital and technology from foreign countries also made production process profitable for the private sector, thus ensuring greater participation.

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