GROWING TRENDS OF PRIVATIZATION । PARAGRAPH GROWING TRENDS OF PRIVATIZATION

GROWING TRENDS OF PRIVATIZATION 

Introduction :- Privatization is a trending concept in the developing nations of the world at present. The Indian government is selling different public sectors of the nation. Everybody in the nation has their own views and opinions regarding the concept of privatization (Growing Trends of Privatization). Many believe that this step to be a boon for the development of the nation while many have the opinion that in this way the government is selling India. We will be discussing this concept in the essay given below.

Benefits of Privatization :- Privatization has created quite a positive impact on the world. Firstly, it has reduced government debts. Similarly, it has lessened the burden of the government. Furthermore, the quality of services has enhanced by a great margin. As there is increasing competition in the private sector, everyone is competing to give their best. Moreover, there are now new products that are entering the market on a daily basis to help people get innovative goods. This helps in mixing creativity with private making and it also benefits the consumers greatly. In addition to that, political interference in various sectors has stopped which is a great sigh of relief. Most importantly, the scenario of rates has increased. Due to the ever-growing competition in the industry, everyone is trying to make the most out of their goods. In order to do that, they offer competitive rates so that everyone can benefit. This brings profits to consumers as well as business owners.

Drawbacks:- Private sectors mainly focus on earning a good profit rather than thinking socially and working for the welfare of the people as Public sectors do. Corruption and businesses in unlawful ways are common in Private management. They can adopt any of the corrupt ways to get benefited with surplus profit and be in top ranking. The price of the products may rise after the private ownership and the customers have no option other than buying the costly items. There is no transparency in the work of the private sectors as they are not bound to show the details of every work to the government as done by the government sectors.

Rising of the Concept of Privatization in India :- India after getting independence in 1947 had established several public sector units. The government never gave way to any of the private sectors to interrupt the economy of India. This trend was executed in the nation for years. The Indian economy was greatly affected after 1980’s and thus it started decreasing at a faster rate. The nation was undergoing a financial crisis. This led to the initiation of LPG reforms in the economy of India in the year 1991.LPG stands for Liberalization, Privatization, and Globalization. This reform was instituted by our former Prime Minister Manmohan Singh. This opened the economy of India to the private sectors worldwide. These reforms have also led to foreign investment and attaining global recognition. LPG reforms had helped in enhancing the economy of India. The initiation of this reform has fostered economic growth in the nation. The employment opportunities increased in the nation that further resulted in decreasing poverty in the nation. The GDP of the nation also increased from 5.7 % to 6.5%.

Forms of Privatization in India :- 

Divestment :- In this method, the government sells the maximum percentage of shares to private enterprises. The government still has some stake holding in the firm so that it may involve itself in the decision-making process of the company.

Disinvestment :- It refers to the sale of the public sectors to the private sectors so that the loss can be prevented. Every disinvestment is not complete selling of the public sector unit.

Delegation :-  This method states that the government in the form of lease, contract, or franchise consigns the responsibilities of the company to the private sector. The private sector is responsible for handling daily work and ensuring good services but the responsibility of managing and controlling is in the hands of the government.

Displacement :- The private company slowly and gradually acquires the public sector and ends the role of government from those.

Conclusion :- Privatization has been a general trend in the developed countries of the world like the United Kingdom, USA, France, Europe, etc. The economy has also increased in these countries because of the adoption of different forms of privatization. The method of privatization is now growing in developing countries to make the nation a globalized one. Although privatization has become a trend in the world, there are people all around the world who are unsatisfied with the concept of privatization of the government sectors but could do nothing to save them.