Page 204 - DECO303_INDIAN_ECONOMY_ENGLISH

Unit 12: Privatisation and Economic Reforms

or like products are ordered during office timings. Pizza is a preferred meal for small and Notes
casual parties at offices. Among 67%, only 13% take it regularly that is at least 4 times in a
week. Remaining 33% is ordered from houses and other places. Of this 33%, 89% are
occasional purchasers who order the Pizza on a particular occasion, moment, small
gathering. Houses which regularly take Pizza as substitute to Dinner/Lunch are negligible.
However, it is ordered as add on to lunch for a different flavour. Of this 33%, only 11% are
regular eaters (at least 4 times in a week) of Pizza or like products. It is a situation of a
Metro. The acceptance of Pizza or like products as a serious meal in Tier II cities or
onwards is questionable. In fact, the Pizza retail chains are not only competing among
themselves rather they are attempting to change the mind-set of people.
The company has 13 training centres supported by a large number of regional training
centres which focus on providing good products, service and timely delivery. Later in
2004, the company focused on its 30 – minutes quick delivery service with its ’30 minutes
nahin toh free’ campaign. Next, the company toyed with introducing ‘fun meal for four’
and ‘Pizza mania’ campaign to lure the unexplored Tier II consumers. Recently, it launched
an online home delivery booking service for its customers in Bangalore on the test basis.
Domino’s is also using below the line activities such as door hangers and pamphlets
advertising to promote itself.
According to the Food Franchising report, the organized food industry which includes
sale of foods and beverages for immediate consumption, was estimated to be ` 8,000 crore
in 2008 and is growing rapidly. A study by Technopark in 2009 revealed that individuals
eat out an average of seven times a month. Quick Service Restaurants (QSR) which includes
fast food chains like McDonald’s, Pizza Hut, Domino’s Pizza, etc. are a large recipient of
this growing trend. As India moves towards increasing disposable incomes and working
couples, the growth potential for restaurants is bound to grow.
Source: Dr Mittal, Vivek. (1990) Business Environment. Excel Books Publications. New Delhi

12.2 Disinvestment

In this section, you will learn about the concept of disinvestment. The performance of the public
sector was far from acceptable. Diseconomies of scale crept into the public sector. The nine
high-performing public sector enterprises (Navratnas) account for approximately 75 per cent of
profits of all public sector enterprises. Most of the others are running in losses. The profitability
and ROI of profit-making units too is very low in comparison to industry standards.

Of the several factors responsible for low profits in the public sector undertakings, the following
are specifically important:
1. Price policy of public sector undertaking

2. Underutilisation of capacity
3. Problems related to planning and construction of projects
4. Problems of labour, personnel and management
5. Lack of autonomy.

In order to ease these problems, the government decided to disinvest its stake in PSUs.
It is important for you to understand that disinvestments connote decrease government stake in
the public sector. Disinvestment includes the conversion of money claims or securities into
money or cash. They may or may not lead to privatisation, i.e., transfer of control in private
hands. Similar to the case of Maruti Suzuki and BALCO, disinvestments led to the transfer of
control into private hands, but in the case of public sector banks and most of the oil companies,

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