Friday, 19 April 2019

Essay on Privatization in India

Essay on Privatization in India

When India gained its independence, there was hardly any industry in the country. Our leaders initiated state-controlled industries so that basic infrastructure could be built which could contribute to the progress and development of the country. This concept worked not only in our country but also in most of the developing countries of the world. However, despite serving the basic concept of various industries in production, consumer-oriented and service sectors were established, there crept in various malaise that are natural with the workforce which is not alive to the needs of the nation and is lethargic. It was the reason that the most of the public sector units suffer losses and become a source of drain on the exchequer. It was here that free economy was taken up and the public sector units needed to become either commercially competitive to the private sector or be transferred to the private hands. Since 1990, privatization has become the buzzword as far as development is concerned.

It may be known that the most of the public sector units presently incur losses and their performance is below par. In essence, privatization means transfer of state holdings to private hands, in part or in full. It can be done in various ways; for example, auction, stock offer, management-employee buyouts, negotiated sales, leasing, joint venture, sale of equity etc. it means that the industries, which were suffering losses, were either to restructure themselves and turn into profit-making organizations, or to be handed over to the private sector to be operated efficiently in accordance with the market norms.

But the question remains—can privatization solve all problems related to the public sector units? Is privatization the only solution? These questions need to be dwelt upon in depth, because there is a basic difference between public sector units and private sector units. The inefficiency but inevitability of the public sector units was debated through the 90s. it was recognized that there were sectors or areas in which the presence of public sector units was a must, while the presence of private sector units could but be relied upon in a few core areas because the private sector has to be guided by profit making. If its aspirations as regards profit were not met, it was hardly expected to take interest large sums of amount    in infrastructure. Private sector would be hardly interested in far flung areas or rural areas where they were not likely to gain. On the other hand, the motive of the public sector units is to lay the infrastructure, on the basis of which development of the country could be thrust forward. Such motivation is simply absent in the private sector.

There is another aspect; the government would not like to dispose off its profit-making units. After all it too needs industries which bring revenues which can be utilized for various purposes. It could not depend on the private sector out and out for all its revenue needs. There are other apprehensions too. The supremacy of the private sector could make the consumer a gullible guy who may be subjected to undue exploitations.

The introduction of private economy, fortunately, has shown that the ultimate beneficiary is the consumer, as we can see that the rates in the telecommunication sector are going down by the day, and the public sector units have to compete against the private sector keeping in with the market requirements. It has helped improve the callous attitude of the public sector units to a large extent.

As of now, the private sector units have made their presence felt in every field to the benefit of the nation, though there are many fields which continue to be regulated by the government. The performance of the private sector is expected to lead India to progress and development.  

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