Uploaded by Harshit Manwani


As PM Modi says, Privatization is the need of the hour. As the world economy tends to
become one global village, privatization as a policy norm seems to override political
compulsions as an instrument for achieving competitive efficiency and resource
Privatization is beneficial for the growth and sustainability of the state-owned enterprises.
Following the trend of privatization across the world, the Indian government in the 1990s
also introduced privatization amid hue and cry from many of the political and social groups.
To achieve an increase in the output of the country there is a need for privatization at a
rapid scale which will help in improving quality of the products by reducing unit costs,
curbing public spending and raising cash to reduce public debt.
Privatisation always helps in keeping the consumer needs uppermost, it helps the
governments pay their debts, it helps in increasing long-term jobs and promotes
competitive efficiency and open market economy. In a rapidly rising economy like India
there is a need for the government to realign its priorities in mobilizing the skills and
resources of the private sector in the larger task of the development.
Nowadays privatization is being seen as a solution towards the problems of public
enterprises as these enterprises on being transferred from the public to the private hands
will become less politicized which as a result will help in ceasing the administrative
corruption. It will also help n increasing the tax revenues from profits and strengthening
the public treasury. The advantages of privatization can be perceived from both
microeconomic and macroeconomic impacts that privatization exerts.
If I tell u about the :Microeconomic advantages: State owned enterprises generally are outdone by the private
enterprises competitively. When compared the latter, it shows better results in terms of profits
and efficiency and productivity. Therefore, privatization can provide the necessary push to
the underperforming PSUs. Privatization brings about fundamental structural changes
providing momentum in the competitive sectors. Privatization leads to implementation of the
global best practices along with management and motivation of the best human talent to
foster sustainable competitive advantage and improvised management of resources.
Macroeconomic advantages: Privatization has a positive impact on the financial growth of
the sector which was previously state dominated by way of decreasing the deficits and debts.
The net transfer to the State owned Enterprises is lowered through privatization. It helps in
escalating the performance benchmarks of the industry in general. It can initially have an
undesirable impact on the employees but progressively in the long term, shall prove
advantageous for the growth and prosperity of the employees.P riv a tiz e d e n t e r p ris e s p
r o vid e b e t t e r a n d q uic k s e rvic e s t o t h e clie n t s a n d h elp in im p r o vin g t h e o
v e r all in f r a s t r u c t u r e o f t h e c o u n t r y