Following an economic restructuring program, a state-owned utility enterprise was mandated to operate strictly as a profit-oriented corporate entity, relying entirely on its internally generated revenue for both operational and capital expenditures while state subventions were completely withdrawn. However, the government retained 100% equity ownership of the enterprise and maintained legal barriers to market entry. Which policy of public enterprise reform was implemented in this scenario?
- Full commercializationAnswer
- BOutright privatization
- CEconomic deregulation
- DPartial commercialization
Answer
Full commercialization is the correct policy implemented because the state retained complete ownership while completely eliminating subsidies and requiring the enterprise to generate a profit.
Full commercialization occurs when a public enterprise is restructured to operate profit-consciously as a private commercial venture without receiving any government subventions or operational subsidies, while the state maintains complete (100%) ownership of the equity.
Step-by-Step Solution
Key Concept
Distinction between Full Commercialization, Partial Commercialization, Privatization, and Deregulation