Nationalisation
Topic: Industrial Policy, Public Sector, MSMEs and Disinvestment · NCERT: Class 11, Ch 2 "Indian Economy 1950-1990"; Class 11, Ch 8 "Comparative Development Experiences of India and its Neighbours"
Meaning
Nationalisation means the government takes over firms that private owners used to own. After Independence, India nationalised firms to bring key sectors under state control, in line with the goal of a "socialist pattern of society". Some loss-making private firms were also taken over to protect workers' jobs.
Example
In 1969 the government nationalised 14 banks, and it took over 6 more in 1980. Other takeovers followed: life insurance in 1956 (LIC), coal mines in 1971-73 and general insurance in 1972 (GIC).
Don't confuse with
- Privatisation: this is the opposite process. The government gives up ownership or management of a state enterprise, for example by selling it.
- Public sector reservation: this keeps certain industries for state firms in the future. It does not take over firms that already exist.
Related concepts
- Industrial policy
- Capital goods industry
- Commanding heights
- Capital-intensive industrialisation
- Private sector
- Public sector reservation