The myth of socialist economy of nationalization has been exploded. Some of the critics of nationalization called it state capitalism. But by the end of 1990 it was realized by the people of East European countries which were the breeding ground of communism that it was a hand maid of bureaucrats, dictators and generals in the armed forces. The proletariat and the common man reaped no benefits from the system. The nationalized industry, agriculture and financial institutions, provided funds for the well placed authority in the Communist countries. They replaced the feudal lords in enjoying comforts and luxuries. The common man remained where he was. He revolted against the political system as it starved him through economic mismanagement. After 70 years he dug the grave and buried it forever in Soviet Russia where it was born.

The journey of Marxist concept from the land of Lenin and Stalin to the third world democratic countries was also dangerous. In USSR and East European countries people could not form trade unions. In India, the biggest democracy of the world, it is their fundamental right. In communist countries it provided luxurious life to fifty per cent of the people in the Imperial army and the bureaucratic bosses. In India it is a bonanza for 2 per cent of the populace who are backed by powerful trade unions. They enjoy at the cost of 70% of the work force employed in unorganized sector. The democratic norm of economic equality is nowhere found.

The progress of a country depends upon increase in production –in industries, agriculture, services, transport, and management and communication network. All of these can be both in the private sector and the public i.e. nationalized sector. In private sector personal interest is the driving force in small installations as well as huge concerns. In public sector it is no one’s work. With a corrupt bureaucracy and slumbering management one may not work at all, may not add a single penny to the G.N.P and no one minds it as all sail in the same boat. A private doctor remains in his clinic from morning till evening. A doctor in Public Health Services may visit the dispensary once a week it has created a vast army of shirkers in India. Efficiency is at very low ebb in the public sector.

Accountability is another important factor in increasing the productivity. If the output falls someone should be responsible for it. it is this factor that makes the people sincere in the private sector. One is judged not from his political contracts or flattery but from the work and quality of work he puts in. not only promotions but even the continuity of job depends on it. In public sector no one is accountable for the loss of production, accumulation of stocks, and failure of assets, outdated machinery and not sticking to quality. It all leads to heavy losses. In only one sector i.e. textiles there are more than 100 sick mills under National Textile Corporation. They are being run under these compulsions resulting in heavy losses. Steel industry, heavy chemicals. Fertilizers, power generations, transport all meet the same fate in public sector. It is because of this that Russia has been importing food grains from the USA, Canada and Australia for a long time.

After the coup of the hardliners against Gorbachev in August 1991 USSR had only ten days’ food for the people of the country. It has given rise to two phenomena- Privatization of all production units and a shift from socialistic to market economy. After the fall of Berlin wall all nationalized services were sold to private industrialists and managerial concerns in Germany. Same was the fate of agencies of production in Poland, Czechoslovakia, Romania, Hungary and Bulgaria. Russia is no expectation to it while China has already invited and accommodated a number of foreign industrialists on her land. Mr.N.D.Prabhu who retired as chairman and managing director of Canara bank in the last week of august, 1991 said that there should be least interference of the government in the functioning of banks. It will be an opportune day when the politicians in this country realize that not nationalization but privatization is the real panacea for most of the economic ills. The government is not only realizing it but giving it a practical shape too.

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