Project Case Study
Undertaking state-owned enterprise reforms in Andhra Pradesh
Building a strong enterprise reform unit in Andhra Pradesh
Andhra Pradesh is one of India’s wealthier and more developed states but was nonetheless saddled with considerable international debt. Between 1998 and 2004, funded by the Asian Development Bank, we provided technical assistance aiming to reduce the state’s fiscal burden by embarking on the reform of 87 state owned enterprises and cooperatives.
We were responsible for setting up the autonomous body charged with the implementation of the reforms. We also established the Social Safety Net Programme, designed to mitigate the negative labour impacts of the reforms, which with a large proportion of people employed by the state was set to be a significant issue.
In order to do this, we formulated an overall privatisation and public enterprise reform strategy, strengthened the institutional framework for privatisation and enterprise reform, and advised on organisation development, capacity building and training for the Implementation Secretariat’s staff. We additionally procured equipment and managed sub-contracted firms of Indian experts in an effort to make the project sustainable and generate employment.
We advised on industry specific issues such as latest industrial trends, post-privatisation regulation and the structuring of privatisation according to industry needs, and assisted the government in carrying out the relevant transactions.
The privatisation programme ended up raising US$100 million in sales revenues with a total positive fiscal impact of $300 million, going a long way to easing the state’s financial burden.
“The assistance we have received from Adam Smith International has been highly professional and very useful and has enabled us to move ahead much more quickly than would otherwise have been the case.”
Deepak Panwar, Principal Secretary, Department of Public Enterprises, Govt. of Andhra Pradesh