Public Enterprises Department

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The Public Enterprises Department was established by the Government of Andhra Pradesh on 19-11-1998 vide Government Order No. 491.

The main features of the Department were as follows:

* The Department consisted of two wings i.e., the Secretariat wing and the Advisory wing both headed by the Principal Secretary to Government.

* The Public Enterprises Department functioned as an independent department like Finance and Law.  All Administrative Department take concurrence on all the proposals relating to the Public Enterprises under their jurisdiction from Public Enterprises Department.

* The Public Enterprises Department reviews the functioning of all the Public Sector Enterprises and Cooperative Enterprises periodically in line with the Cabinet Sub Committee / Government’s decisions and suggests measures for improvement and submits reports to Cabinet Sub Committee / Government from time to time.

* The Public Enterprises Department assisted the Cabinet Sub Committee and implements the Cabinet decisions on restructuring of Public Sector Enterprises and Coperative Enterprises under the supervision of Cabinet Sub Committee.

* The Public Enterprises Department is the Administrative Department for all the Public Sector Enterprises and Cooperative Enterprises identified for disinvestment / privatisation / winding up.

* The Public Enterprises Department was the nodal agency with exclusive responsibility for formulation and implemention of PE Reforms.

* The Public Enterprises Department functioned under the control of the Chief Minister.

Benefits

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Privatisation is the best way to resuscitate and rebuild weakened  State Level Public Enterprises (SLPEs).

Privatisation :

* Stops loss-making SLPEs from adding to government debt;

* Depoliticises SLPEs, remove governmental pressures for over-manning and the sub-optimal use of resources;

* Gives new owners a strong incentive to turn around failing SLPEs into successful businesses;

* Gives new businesses access to investment capital that government cannot provide;

* Raises more money for government through taxing former SLPEs;

* Expands an enterprise and an industry, in the long run creating more jobs and generating wealth for the country.

Public enterprises reform program

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The public enterprises reform program was  established with the following goals :

  • Government to withdraw from sectors operated efficiently  by the private sector while retaining its responsibility as a prudent regulator to ensure social equity and fair competition in the new circumstances.
  • Rationalize Government’s investments in Public Enterprises and restrict itself to areas in which its intervention is needed.
  • Government to be sensitive to hardships caused by privatization and address such issues through a safety net program.
  • To ensure that its agencies & Public Sector Undertakings work more efficiently.

Privatisation

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Privatisation means transferring the control of an enterprise from the government sector to the private sector. Generally, but not always, this also means transferring ownership of the Public sector enterprise as well as control. It can be accomplished by sale or lease. It can be accomplished by the government selling 100% of an enterprise, or selling 51%, or even by selling a minority stake – so long as the private sector is given full managerial control. Without transferring control to the private sector, the government can rise money by selling a smaller share, but that is not privatisation as such.