The idea of socialist economy of nationalization has been proved wrong. 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 served the bureaucrats, dictators and generals in the armed forces. The proletariat (worker) and the common man could not get any benefit from the system.

The progress of a country depends upon increase in production – in industries, agriculture services, transport, and management and communication net work. All of these can be both in the private sector and the public i.e., nationalized sector. In private sector personal interests 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 of the G.RP. and no one minds it for all sail in the same boat. A private doctor remains in his clinic from morning till evening. A doctor in Public Health Service may visit the dispensary once a weak. It has created a vast army of shirkers in India. Efficiency is at a 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 contacts 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 In public sector no one is accountable for the loss of production, accumulation of stocks, and failure of sales, outdated machinery and non adherence to quality.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 which are being run under these constraints resulting in heavy losses. Steel Industry, heavy chemicals, fertilizer, power generation, 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 all people of the country. It has given rise to two phenomenon—Privatization of all production units and a shift from socialistic to market economy. After the fall of the 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 exception to it while China has already invited and accommodated a number of foreign industrialists. Mr. N. D. Prabhu who retired as chairman and managing director of Canara Bank said that there should be least interference of the government in the functioning of banks. It will be a good day when the politicians in this country realize that not nationalization but privatization is the real panacea for most of the economic ills.