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Difficulty: MediumPrivatization, Commercialization, and Deregulation of Public Enterprises

A government-owned port authority underwent structural reorganization where statutory treasury subventions were completely withdrawn, requiring the enterprise to set competitive tariffs, cover all operating expenses, and generate surplus revenue while retaining full state ownership. Which public enterprise reform policy is demonstrated in this scenario?

  1. A
    Privatization
  2. CommercializationAnswer
  3. C
    Deregulation
  4. D
    Nationalization

Answer

Commercialization
Commercialization involves restructuring state-owned enterprises so they operate as profit-making business entities, making them self-funding while government retains complete ownership.

Step-by-Step Solution

1
Analyze the ownership structure described in the scenario.
The government retains 100% ownership of the port authority.
Ownership status distinguishes privatization (sale of equity) from commercialization (retained public ownership).
2
Analyze the operational changes described.
Treasury subsidies are removed, and the enterprise must run at a profit.
Commercialization forces public entities to adopt commercial principles, set cost-reflective prices, and achieve self-financial sustainability without relying on state grants.

Key Concept

Commercialization of Public Enterprises
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Topics

Privatization, Commercialization, and Deregulation of Public Enterprises

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