Privatisation means removing strict control over private sector and making them free to take necessary decisions. Since independence, we accorded top priority to the public sector but the desired results could not be achieved with the encouragement of the public sector. Now the new economic policy tries to expand private sector. In order to encourage private sector following measures have been adopted. Measures to encourage Private Sector in the economy are the following 

1. Reduction in the number of reserved public sector industries. The number of Public Sector industries from 17 to 4.

2. Increasing the share of private sector investment. 

3. Selling the share of public enterprises.

4. No insistance on conversion. Now the financial corporation can not insist the industries for conversion of their loans into equity shares. 

The government has also made attempts to improve the efficiency of PSUs by giving them autonomy in taking managerial decisions.