INTRODUCTION
This manual deals basically with two issues "Why to Privatise" and "How to Privatize". Part A deals about the rationale of privatisation. Part B deals with the procedure of Privatisation. Privatisation has different nomenclature in different countries like `disinvestment', `peoplisation', `popular capitalism', `denationalisation', `prioritisation', `industrial transition', `economic democratisation', `partners in development', `dis-incorporation', `assets sales programme', `transformation and `restructuring'. In this manual, the words privatisation and disinvestment have been used interchangeably.
Why this Manual?
Policymakers, be it in the administrative Ministries or in the State Governments occasionally face a dilemma. They are often convinced about the merits of Privatisation, but do not know how to implement it. The enormous outpouring of literature on Privatisation, the dramatic success of privatisation in a large number of diverse countries, and the economic realities of the excessive burden of overstretched public sector in their States, have convinced them to try privatisation. Yet to most of them, the process of implementing privatisation is shrouded in mystery. This fear of the unknown often discourages them from taking the first step. They are often confronted with a number of questions like which Public Sector Enterprises should be taken up for disinvestment, which method of disinvestment should be followed, how to disinvest to get the best realization and optimize on the objectives, how to prepare documents etc. No standard recipe for disinvestment in Public Sector Enterprises (PSEs) is currently available either at the national level or at the state level. Though a group of international practitioners and advisors in the art and science of privatisation have developed in the West-----lawyers, bankers, accountants, business consultants, communicators and the like, with their large body of accumulated experience and expertise, which is largely related to the Western economies, not much is available to guide, in the developing economies. Thus, while we would do well to learn from the successful experiences of the west, we would have to be careful with the pitfalls, which were responsible for setback to some of the economies in the east. In the final analysis while experience of other countries is available to us by way of guidance, we would have to evolve our own techniques, best suited to our level of development. It makes all the difference whether or not there already exist fully functioning markets, which could integrate or assimilate the former PSEs. The historic, cultural and institutional context influences the way in which and the pace at which privatisation is implemented. Where market economy is not fully developed, ways would have to be found to safeguard the interests of consumers and investors, which would ensure a fuller play to the wealth creating role of the entrepreneurs. The main purpose of this manual is to demystify this process and to share with policymakers, national and international experience on implementation of privatisation.
Who will benefit from this Manual?

This manual is primarily meant for public policymakers entrusted with the job of implementing privatisation decisions. It will be useful to them in the following ways. It will:

Provide overall understanding of the privatisation process.

Assist in planning the logistics to implement the privatisation decision.

Enable to implement the privatisation transactions.

Guide the material supervision of consultants (financial advisors) recruited to implement the privatisation      transactions.

Improve design of privatisation policies by painting a realistic picture of the implementation phase.

What kinds of Privatisation Transactions will benefit from this Manual ?
This manual is intended to be useful for a wide variety of privatisation transactions, for example, the sale of the majority of shares in a public enterprise to a strategic investor, and quasi-privatisation transactions such as management contracts, leases and concessions to the private sector for operating a public utility. Much of the material in the manual is relevant to almost any kind of privatisation transaction that involves competitive bidding. For the sake of clarity the manual takes as a base case a common form of privatisation transaction: the sale of the majority interest in a state-owned enterprise to a strategic partner. Nevertheless, the manual also discusses deviations from this base case and their implications on implementation. It will be most helpful in what has come to be known as case-by-case privatisation. For the sake of convenience, this manual has been divided in two parts. Part A deals with Evolution of Public Sector, Genesis and Rationale of Disinvestment and the Disinvestment Policy of Government of India. Major issues in Disinvestment have also been covered. Experiences of other countries and successful privatisations in India have also been described. A chapter has been devoted to Privatisations in States. Part B deals with the procedure being followed by Government of India. It describes the policy as to which sectors should be taken up for disinvestment, what should be the extent of disinvestment, what methods should be adopted and the procedure to be followed for disinvestment. Various concepts and issues involved in disinvestment have also been discussed along with the various options and methodologies for disinvestment to find out the "best-fit". A chapter has been devoted to describing the various methodologies for valuation. The labour issues have separately been discussed along with the various protections available to the employees. The manual starts by defining the overall objectives and developing an over view of the process that will unfold. While it is not necessary and probably not possible to plan every detail in advance, certain principles and basic modus operandi need to be agreed, conflicting objectives prioritised, the trade off identified and a commitment made to drive the programme through, despite the opposition that will develop from those in favour of maintaining status quo. Several issues relating to disinvestment/privatisation are discussed in this manual and possible solutions thereto provided. The manual also deals with various policy matters and procedures, which may be adopted for disinvestment/privatisation. It may, however, be clarified that such issues, policies, procedures, statements are only illustrative and not exhaustive.
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