Privatization in India

State‐Industry interface has always been a subject of debate because the role of the state in relation to industry depends on the economic philosophy adopted by a country. The two extreme economic philosophies, capitalism and socialism, have their own limitations. Once Winston Churchill observed: “Capitalism is unequally shared wealth while Socialism is equally distributed poverty”. India has followed the path of a “mixed economy” which thrives on the co‐existence of public and private sectors. The joint sector which provides a compromise between public and private sectors has been a subject of debate in the country since the early 1970s. Today when the Indian economy is in transition there is a need to make a fresh assessment of the joint sector. The basic idea underlying the concept is a combination of joint ownership, joint control and professional management. It is a pattern wherein the Government, through its Industrial Development Corporation (IDC), holds 26 per cent of equity capital, the private sector partner holds 25 per cent and the remaining 49 per cent is meant for the public. In fact, the joint sector is the application of the concept of a mixed economy at the micro level.