Disinvestment in India

Nehru’s luminous legacy


From UPSC perspective, the following things are important :

Prelims level: Public sector enterprise

Mains level: Challenges of public sector undertakings


  • Seventy-five years ago, India’s first Prime Minister Pandit Jawaharlal Nehru made these remarks in his stirring speech on India attaining freedom at midnight: “The achievement we celebrate today is but a step, an opening of opportunity, to the greater triumphs and achievements that await us. Are we brave enough and wise enough to grasp this opportunity and accept the challenge of the future?”

Nehru’s vision for India

  • Nehru’s vision of India was anchored in a set of ideas such as democracy, secularism, inclusive economic growth, free press and non-alignment in international affairs and also in institutions that would lay the foundation for India’s future growth.

Leadership of Nehru after independence

  • In 1947, Nehru, as Prime Minister, inherited an India that was politically shattered, socially divided and emotionally devastated. Yet, with restraint and self-confidence, he steered the country through those turbulent times and laid out the vision of a modern, progressive nation that quietly earned the respect of the global community.

Temple of modern India

  • The Bhakra-Nangal Dam: The Bhakra-Nangal Dam project is a series of multi-purpose dams that were among the earliest river valley developments schemes undertaken by the government of India after independence. The project, though, had been conceived long before independence.
  • Bhilai Steel Plant: Bhilai, located in Chhattisgarh, was home to massive iron-ore deposits at Dalli Rajhara. Taking this into consideration, the government of India and the USSR entered into an agreement which was signed on March 2nd 1955, at New Delhi.
  • Bhabha Atomic Research Centre: The Atomic Energy Establishment, Trombay (AEET), was started by the government of India on January 3rd 1954 with the intention of consolidating all research and development activities for nuclear reactors and technology under the Atomic Energy Commission.
  • Indian Council of Agricultural Research (ICAR): to support indigenous scientists like Boshi Sen, who is credited with producing hybrid maize and irradiated wheat mutant.

Relevance of these institutions

  • Economic Development:Economic development mainly depends upon industrial development. Heavy & basic industries like iron & steel, shipping, mining, etc. are required for supplying raw materials to small industries.
  • Regional Development:Private sector usually neglect backward area. But public sector organizations set up their units in economically backward areas. By this public sector removes regional imbalance & brings regional development.
  • Employment:Various public sectors operating in India needs lot of manpower & this provide employment to unlimited individuals according to their education, experience & abilities.
  • Service Motive: Public sector organizations are working with the only motive of providing public utility services to society at large irrespective of profit.
  • Sound Infrastructure:Rapid industrial growth in a country needs sound infrastructure. Infrastructural industries require huge capital for construction of Roads, Railways, Electricity & many such industries. Private sector is unable to have such huge capital & that also without any high return but public sector can easily afford to provide all infrastructural facilities.

Some challenges they face today

  • Inefficient Management: It has been found that these enterprises are managed by public savants. They are not professionally qualified nor experts in the management of industrial enterprises.
  • Lack of Efficiency: They are not run on commercial principles. Their main motto is social welfare, not profit earning.
  • Lack of Innovations: Innovations are essential for economic development. Public enterprise lacks it due to monopoly or lack of competition. The private sector is always busy with innovating new techniques, new production methods, etc. For the purpose of cost reduction and profit maximization.

Some suggestions to address the challenges

  • Sound business principles: The enterprise should be run on sound business principles. There should be focus on improving efficiency in all functional areas. Policies, systems and procedures should be modified with the aim of making the enterprise flexible, efficient and profitable.
  • Autonomy: Public enterprises should have considerable autonomy in their functioning. Authority should be delegated and they should have the freedom to take decisions. Autonomy would ensure that decisions are taken at the right time and growth opportunities utilized in the best possible manner.
  • Freedom from political interference: Many public enterprises are considered to be the kingdoms of politicians. They are run to suit the needs and requirements of the ruling party.


  • Today, opinions are divided about the iconic leader. While Nehru always had his critiques even back in the day, a significant section of the masses despise the dynasty politics of the Congress that ensued after his passing in 1964.
  • However, his contributions to India’s freedom, and as a Prime Minister to his country are acknowledged by people both within and outside India. His shortcomings do not take away from the legacy he cemented as a propagator for freedom, and as the free nation’s first Prime Minister.

Mains question

Assess the Nehruvian legacy of public sector. Do you think they are still relevant today? While discussing challenges they face what suggestion will you give to improve their performance.

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