Why was balco privatised

Marred with political controversy and allegations of corruption by the opposition, the disinvestment deal further stalled the work at BALCO. Instigated by the local politicians, the workers of Chhattisgarh plant went on an indefinite strike 3 rd March which lasted for 67 days. The situation was so tense that at a particular time it seemed that the employees might resort to damaging plant equipments and property. Congress ruled Chhattisgarh government under Ajit Jogi, restricted the supply of water and electricity to the plant.

Long lasting protests and strikes have completely stalled the production facilities of BALCO, which in turn incurred a loss to the tone of Rs 50 crores due to the strikes.

Despite the disinvestment was marred in controversies and allegations of corruption and alleged irregularities were made, the deal was finalized after initial obstructions. The deal was struck to improve the production and profit margin by bringing in a potential investment partner. Looking at the turnover of fiscal year , which is Rs. I'm Konan! Would you like to get a custom essay? How about receiving a customized one?

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By July , the company is a subsidiary of the Japanese car and motorcycle manufacturer Suzuki Motor Corporation which holds It was a loss-making company.

The govt still retains a In , the government sold 25 percent stake out of The government still retains a 36 percent equity share in the company. There are no easy answers to this question. Privatisation leads to creation of wealth. The cost of production is reduced and profits are maximised. It is certainly a good step if the government feels that a particular sector can be opened up to competition and it will benefit the market and the consumer.

However, this does not hold true always. Sometimes, it also leads to corporate monopolies as the big assets created by the government are handed over to a bunch of corporates. At the same time, PSUs have an important role to play in the economy. Because PSUs can never solely be driven by the idea of creating wealth, they cannot be compared to the private sector. Because these companies are responsible for social welfare, they have a larger workforce when compared to the private sector.

Therefore, despite the fact that the cost of production is high, PSUs cannot be done away with.